Guam § 28724 - Dismissal.

§ 28724. Dismissal.

(a) A derivative proceeding shall be dismissed by the court on motion

by the corporation if one of the groups specified in subsections (b) or (f) has

determined in good faith after conducting a reasonable inquiry upon which

its conclusions are based that the maintenance of the derivative proceeding is

not in the best interests of the corporation.

(b) Unless a panel is appointed pursuant to subsection (f), the

determination in subsection (a) shall be made by:

(1) a majority vote of independent directors present at a meeting of

the board of directors if the independent directors constitute a quorum;

or

(2) a majority vote of a committee consisting of two or more

independent directors appointed by majority vote of independent

directors present at a meeting of the board of directors, whether or not

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such independent directors constituted a quorum.

(c) None of the following shall by itself cause a director to be

considered not independent for purposes of this section:

(1) the nomination or election of the director by persons who are

defendants in the derivative proceeding or against whom action is

demanded;

(2) the naming of the director as a defendant in the derivative

proceeding or as a person against whom action is demanded; or

(3) the approval by the director of the act being challenged in the

derivative proceeding or demand if the act resulted in no personal

benefit to the director.

(d) If a derivative proceeding is commenced after a determination has

been made rejecting a demand by a shareholder, the complaint shall allege

with particularity facts establishing either:

(1) that a majority of the board of directors did not consist of

independent directors at the time the determination was made, or

(2) that the requirements of subsection (a) have not been met.

(e) If a majority of the board of directors does not consist of

independent directors at the time the determination is made, the corporation

shall have the burden of proving that the requirements of subsection (a) have

been met. If a majority of the board of directors consists of independent

directors at the time the determination is made, the plaintiff shall have the

burden of proving that the requirements of subsection (a) have not been met.

(f) The court may appoint a panel of one or more independent persons

upon motion by the corporation to make a determination whether the

maintenance of the derivative proceeding is in the best interests of the

corporation. In such case, the plaintiff shall have the burden of proving that

the requirements of subsection (a) have not been met.