Court Opinion

ID: 9709427
Source: CourtListenerOpinion
Date Created: 2023-08-26 03:47:18.128974+00
Date Added: 2024-06-11T18:22:48.775133
License: Public Domain

KIRSCH, Judge,
dissenting:
I respectfully dissent.
In W & W Equipment Co. v. Mink (1991), Ind.App., 568 N.E.2d 564, this court allowed a narrow exception to the rule requiring derivative shareholder actions. - Expressly stating that the exception did not apply to all close corporations, we held "that the trial court did not err in allowing this cause of action to proceed absent compliance with the derivative requirements because there were only two shareholders, one of whom was involved in the breach of fiduciary duty." Id. at 571 (emphasis added). The narrow Mink exception should not be extended. In the case of a corporation with only two share*294holders, there is no possibility of a multiplicity of actions; in the case of a corporation with three or more shareholders, there is such a possibility. Similarly, there is no risk of prejudice to the rights of other shareholders where there are only two; there is such a risk where there are more. Requiring a derivative proceeding here would not be exalting form over substance. Rather, it would recognize the corporate entity and protect that entity from multiple suits, its creditors from loss of the proceeds of recovery, and its shareholders from prejudice. I would affirm the trial court in all respects.