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ACTIONS BY MEMBERS

Conn. Gen. Stat. tit. 34, ch. 613a, pt. PART VIII
in effect

Conn. Gen. Stat. § 34-271 Direct action by member.

34-271. Direct action by member. (a) Subject to subsection (b) of this section, a member may maintain a direct action against another member, a manager or the limited liability company to enforce the member's rights and otherwise protect the member's interests, including rights and interests under the operating agreement or sections 34-243 to 34-283d, inclusive, or arising independently of the membership relationship. (b) A member maintaining a direct action under this section must plead and prove an actual or threatened injury that is not solely the result of an injury suffered or threatened to be suffered by the limited liability company. (P.A. 16-97, S. 64.) History: P.A. 16-97 effective July 1, 2017.

Conn. Gen. Stat. § 34-271a Derivative action.

34-271a. Derivative action. A member may maintain a derivative action to enforce a right of a limited liability company if: (1) The member first makes a demand on the other members in a member-managed limited liability company, or the managers of a manager-managed limited liability company, requesting that they cause the company to bring an action to enforce the right, and the managers or other members do not bring the action within ninety days; or (2) a demand under subdivision (1) of this section would be futile. (P.A. 16-97, S. 65.) History: P.A. 16-97 effective July 1, 2017.

Conn. Gen. Stat. § 34-271b Derivative action. Proper plaintiff.

34-271b. Derivative action. Proper plaintiff. A derivative action to enforce a right of a limited liability company may be maintained only by a person that is a member at the time the action is commenced and: (1) Was a member when the conduct giving rise to the action occurred; or (2) whose status as a member devolved on the person by operation of law or pursuant to the terms of the operating agreement from a person that was a member at the time of the conduct. (P.A. 16-97, S. 66.) History: P.A. 16-97 effective July 1, 2017.

Conn. Gen. Stat. § 34-271c Derivative action. Pleading.

34-271c. Derivative action. Pleading. In a derivative action, the complaint must state with particularity: (1) The date and content of plaintiff's demand and the response by the managers or other members to the demand; or (2) why the demand should be excused as futile. (P.A. 16-97, S. 67.) History: P.A. 16-97 effective July 1, 2017.

Conn. Gen. Stat. § 34-271d Derivative action. Special litigation committee.

34-271d. Derivative action. Special litigation committee. (a) If a limited liability company is named as or made a party in a derivative proceeding, the company may appoint a special litigation committee to investigate the claims asserted in the proceeding and determine whether pursuing the action is in the best interests of the company. If the company appoints a special litigation committee, on motion by the committee made in the name of the company, except for good cause shown, the court shall stay discovery for the time reasonably necessary to permit the committee to make its investigation. This subsection does not prevent the court from: (1) Enforcing a person's right to information under section 34-255i; or (2) granting extraordinary relief in the form of a temporary restraining order or preliminary injunction. (b) A special litigation committee must be composed of one or more disinterested individuals, who may be members or managers. (c) A special litigation committee may be appointed: (1) In a member-managed limited liability company: (A) By the consent of a majority in interest of the members not named as parties in the proceeding; or (B) if all members are named as parties in the proceeding, by a majority in interest of the members named as defendants; or (2) in a manager-managed limited liability company: (A) By a majority of the managers not named as parties in the proceeding; or (B) if all managers are named as parties in the proceeding, by a majority of the managers named as defendants. (d) After appropriate investigation, a special litigation committee may determine that it is in the best interests of the limited liability company that the proceeding: (1) Continue under the control of the plaintiff; (2) continue under the control of the committee; (3) be settled on terms approved by the committee; or (4) be dismissed. (e) After making a determination under subsection (d) of this section, a special litigation committee shall file with the court a statement of its determination and its report supporting its determination and shall serve each party with a copy of the determination and report. The court shall determine whether the members of the committee were disinterested individuals and whether the committee conducted its investigation and made its recommendation in good faith, independently, and with reasonable care, with the committee having the burden of proof. If the court finds that the members of the committee were disinterested individuals, and that the committee acted in good faith, independently, and with reasonable care, the court shall enforce the determination of the committee. Otherwise, the court shall dissolve the stay of discovery entered under subsection (a) of this section and allow the action to continue under the control of the plaintiff. (P.A. 16-97, S. 68.) History: P.A. 16-97 effective July 1, 2017.

Conn. Gen. Stat. § 34-271e Derivative action. Proceeds and expenses.

34-271e. Derivative action. Proceeds and expenses. (a) Except as provided in subsection (b) of this section: (1) Any proceeds or other benefits of a derivative action, whether by judgment, compromise or settlement, belong to the limited liability company and not to the plaintiff; and (2) if the plaintiff receives any proceeds, the plaintiff shall remit them immediately to the company. (b) On termination of the derivative proceedings, the court may order: (1) The limited liability company to pay the plaintiff's expenses incurred in the proceeding if it finds that the proceeding has resulted in a substantial benefit to the limited liability company; (2) the plaintiff to pay any defendant's expenses incurred in defending the proceeding if it finds that the proceeding was commenced or maintained without reasonable cause or for an improper purpose; or (3) a party to pay an opposing party's expenses incurred because of the filing of a pleading, motion or other paper, if it finds that the pleading, motion or other paper was not well grounded in fact, after reasonable inquiry, or warranted by existing law or a good faith argument for the extension, modification or reversal of existing law and was interposed for an improper purpose, such as to harass or cause unnecessary delay or needless increase in the cost of litigation. As used in this subsection, “expenses” means reasonable expenses of any kind that are incurred in connection with a matter including, but not limited to, reasonable counsel fees. (c) A derivative action on behalf of a limited liability company may not be voluntarily dismissed or settled without the court's approval. (P.A. 16-97, S. 69.) History: P.A. 16-97 effective July 1, 2017.
Source: Connecticut General Assembly (cga.ct.gov)URL: https://www.cga.ct.gov/current/pub/chap_613a.htmFetched: 10/20/2026

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