§ 13.1-669.1

Judicial determination of corporate officers and review of elections and shareholder votes

A. Upon application of, or in a proceeding commenced by, a person specified in subsection B, the circuit court in the county or city in which the principal office of the corporation is located, or, if none in the Commonwealth, in the county or city in which its registered office is located may determine:

1. The validity of the election, appointment, removal, or resignation of a director or officer of the corporation;

2. The right of an individual to hold the office of director or officer of the corporation;

3. The result or validity of an election or vote by the shareholders of the corporation;

4. The right of a director to membership on a committee of the board of directors; and

5. The right of a person to nominate, or an individual to be nominated as, a candidate for election or appointment as a director of the corporation, and any right under a bylaw adopted pursuant to subsection C of § 13.1-624 or any comparable right under any provision of the articles of incorporation, contract, or applicable law.

B. Any application or proceeding pursuant to subsection A may be filed or commenced by any of the following persons:

1. The corporation;

2. A shareholder of the corporation;

3. A director of the corporation, an individual claiming the office of director, or a director whose membership on a committee of the board of directors is contested, who, in each case, is seeking a determination of his right to such office or membership;

4. An officer of the corporation or an individual claiming to be an officer of the corporation, in each case who is seeking a determination of his right to such office; or

5. A person claiming a right covered by subdivision A 5 and who is seeking a determination of such right.

C. In connection with any application or proceeding pursuant to subsection A, the following shall be named as defendants, unless such person made the application or commenced the proceeding:

1. The corporation;

2. An individual whose right to office or membership on a committee of the board of directors is contested;

3. Any individual claiming the office or membership at issue; and

4. Any person claiming a right covered by subdivision A 5 that is at issue.

D. In connection with any application or proceeding under subsection A, service of process may be made upon each of the persons specified in subsection C either by:

1. Serving on the corporation process addressed to such person in any manner provided by statute of the Commonwealth or by rule of the applicable court for service of process on the corporation; or

2. Serving on such person process in any manner provided by statute of the Commonwealth or by rule of the applicable court.

E. When service of process is made upon a person other than the corporation by service upon the corporation pursuant to subdivision D 1, the plaintiff and the corporation promptly shall provide written notice of such service, together with copies of all process and the application or complaint, to such person at the person’s last known residence or business address, or as permitted by statute of the Commonwealth.

F. In connection with any application or proceeding under subsection A, the court shall dispose of the application or proceeding on an expedited basis and also may:

1. Order such additional or further notice as the court deems proper under the circumstances;

2. Order that additional persons be joined as parties to the proceeding if the court determines that such joinder is necessary for a just adjudication of matters before the court;

3. Order an election or meeting be held in accordance with the provisions of § 13.1-656 or otherwise;

4. Appoint a master to conduct an election or meeting;

5. Enter temporary, preliminary, or permanent injunctive relief;

6. Resolve solely for the purposes of the proceeding any legal or factual issues necessary for the resolution of any of the matters specified in subsection A, including the right and power of persons claiming to own shares to vote at any meeting of the shareholders; and

7. Order such relief as the court determines is equitable, just, and proper.

G. It shall not be necessary to make shareholders parties to a proceeding or application pursuant to this section unless the shareholder is a required defendant under subdivision C 4, relief is sought against the shareholder individually, or the court orders joinder pursuant to subdivision F 2.

H. Nothing in this section limits, restricts, or abolishes the subject matter jurisdiction or powers of the court as existed prior to July 1, 2015. An application or proceeding pursuant to this section is not the exclusive remedy or proceeding available with respect to the matters specified in subsection A.

History

2010, c. 782; 2015, c. 611.

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