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  • NJ A2970
  • Revises applicability of law concerning derivative proceedings and shareholder class actions.
Introduced
(2/16/2016)
In Committee
(6/19/2017)
Crossed Over
(3/16/2017)
PassedSignedDead/Failed/Vetoed
2016-2017 Regular Session
This bill revises the applicability of provisions of the "New Jersey Business Corporation Act" concerning derivative proceedings and shareholder class actions. Under current law, the derivative proceeding and shareholder class action provisions of the "New Jersey Business Corporation Act" apply only if a corporation makes them applicable in its certificate of incorporation. This bill provides that the following provisions will apply to a corporation unless that corporation chooses to vary the applicability or effect of the provisions in its certificate of incorporation: 1) The conditions for commencing and maintaining a derivative proceeding; 2) The actions that must be taken before a shareholder may commence a derivative proceeding; 3) The conditions for a court to order a stay of a derivative proceeding; 4) The conditions for dismissal of a derivative proceeding; and 5) The necessity of court approval for the discontinuation or settlement of a derivative proceeding or shareholder class action. The bill also provides that the following provisions of current law will apply only if a corporation makes them applicable in its certificate of incorporation: 1) The rules governing how a court should allocate expenses following the termination of a derivative proceeding or shareholder class action; and 2) The allowance that a defendant corporation in a derivative proceeding and shareholder class action may require the plaintiff to provide security for reasonable expenses related to the proceeding or class action. The New Jersey Corporate and Business Law Study Commission recommends the legislative reforms in this bill.
Commerce, 2nd Reading in the Assembly, 2nd Reading in the Senate, Financial Institutions and Insurance, Passed Assembly
Reported from Senate Committee, 2nd Reading  (on 6/19/2017)
 
 
Date Chamber Action Description
6/19/2017 S Reported from Senate Committee, 2nd Reading
6/19/2017 Senate Commerce Hearing (19:00 6/19/2017 Meeting moved to Committee Room 10.)
6/19/2017 Senate Commerce Hearing (19:00 6/19/2017 Deleted S-2919 & A-4498 (2R); Added S-711, A-755, S-3206 & A-431)
6/19/2017 Senate Commerce Hearing (19:00 6/19/2017 )
5/1/2017 S Received in the Senate, Referred to Senate Commerce Committee
3/16/2017 A Passed by the Assembly (74-0-0)
2/27/2017 A Reported out of Assembly Committee, 2nd Reading
2/27/2017 Assembly Financial Institutions and Insurance Hearing (19:00 2/27/2017 )
2/16/2016 A Introduced, Referred to Assembly Financial Institutions and Insurance Committee
Date Motion Yea Nay Other
Detail 6/19/2017 Senate Commerce Committee: Reported Favorably 4 0 2
Detail 3/16/2017 Assembly Floor: Third Reading - Final Passage 74 0 6
Detail 2/27/2017 Assembly Financial Institutions and Insurance Committee: Reported Favorably 11 0 2