X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

Galen Kilburn, the majority stockholder of Kilburn-Young Asset Management Corp. KYAMC, filed a derivative action on behalf of the corporation against Robert Young, alleging among other things that Young misappropriated corporate funds for his own benefit while serving as president and chief executive officer. Young moved to dismiss the complaint on the grounds that Kilburn failed to join the corporation as an indispensable party. The trial court granted this motion, as well as Young’s request for attorney fees. For reasons discussed below, we reverse.

1. Young concedes that “Kilburn possesses the authority to act derivatively on KYAMC’s behalf by filing a proper shareholder derivative action,” but contends that Kilburn must name KYAMC as a defendant in such an action and serve it with process. Young argues that failure to name KYAMC as a defendant is a jurisdictional matter and thus requires dismissal. Kilburn, by contrast, argues that KYAMC is already properly before the court as a party plaintiff by virtue of the fact that he filed the complaint derivatively on its behalf. Kilburn also argues that, even if the corporation is not properly before the court either as a plaintiff or a defendant, the remedy for failure to join an indispensable party is not dismissal, but joinder. We agree with Kilburn’s second contention, but not the first.

 
Reprints & Licensing
Mentioned in a Law.com story?

License our industry-leading legal content to extend your thought leadership and build your brand.

More From ALM

With this subscription you will receive unlimited access to high quality, online, on-demand premium content from well-respected faculty in the legal industry. This is perfect for attorneys licensed in multiple jurisdictions or for attorneys that have fulfilled their CLE requirement but need to access resourceful information for their practice areas.
View Now
Our Team Account subscription service is for legal teams of four or more attorneys. Each attorney is granted unlimited access to high quality, on-demand premium content from well-respected faculty in the legal industry along with administrative access to easily manage CLE for the entire team.
View Now
Gain access to some of the most knowledgeable and experienced attorneys with our 2 bundle options! Our Compliance bundles are curated by CLE Counselors and include current legal topics and challenges within the industry. Our second option allows you to build your bundle and strategically select the content that pertains to your needs. Both options are priced the same.
View Now
May 01, 2025
Atlanta, GA

The Daily Report is honoring those attorneys and judges who have made a remarkable difference in the legal profession.


Learn More
February 24, 2025 - February 26, 2025
Las Vegas, NV

This conference aims to help insurers and litigators better manage complex claims and litigation.


Learn More
March 24, 2025
New York, NY

Recognizing innovation in the legal technology sector for working on precedent-setting, game-changing projects and initiatives.


Learn More

SALARY: $8,000.69 Biweekly$17,334.83 Monthly$208,017.95 AnnuallyOPENING DATE: 01/29/2025CLOSING DATE: 02/27/2025 11:59 PM PacificDEFINITION/...


Apply Now ›

Our client is seeking to hire a supervisory attorney for their growing Alabama team. Qualified candidates will have 8+ years of litigation...


Apply Now ›

Our client , is seeking to hire a mid-senior attorney for their growing Alabama team. Qualified candidates will have 4+ years of litigatio...


Apply Now ›