Illinois Statutes Chapter 805. Business Organizations § 5/7.80. Provisions relating to actions by shareholders

§ 7.80. Provisions relating to actions by shareholders. (a) No action shall be brought in this State by a shareholder in the right of a domestic or foreign corporation unless the plaintiff was a shareholder of record at the time of the transaction of which he or she complains, or his or her shares or voting trust certificates thereafter devolved upon him or her by operation of law from a person who was a holder at such time; provided, however, that a shareholder who does not meet such requirement may nevertheless be allowed in the discretion of the court to bring such action on a preliminary showing to and determination by the court, upon motion and after a hearing at which the court may consider such evidence by affidavit or testimony as it deems material, that plaintiff acquired the shares before there was disclosure to the public or to the plaintiff of the wrongdoing of which plaintiff complains.

(b) A complaint in a proceeding brought in the right of a corporation must allege with particularity the demand made, if any, to obtain action by the directors and either why the complainant could not obtain the action or why he or she did not make the demand. If a demand for action was made and the corporation's investigation of the demand is in progress when the proceeding is filed, the court may stay the suit for thirty days or until the investigation is completed, whichever is less.

(c) A proceeding commenced under this Section may not be discontinued or settled without the court's approval. If the court determines that a proposed discontinuance or settlement will substantially affect the interest of the corporation's shareholders or a class of shareholders, the court may direct that notice be given the shareholders affected.