In any action specified in section six thousand twenty-five, if the plaintiff or plaintiffs hold less than five percent of any class of the outstanding
shares or hold a beneficial interest in shares representing less than five percent
of any class of such shares, then unless the shares and beneficial interest of such
plaintiff or plaintiffs have a fair value in excess of fifty thousand dollars, the
corporation in whose right such action is brought shall be entitled at any stage of
the proceedings before final judgment to require the plaintiff or plaintiffs to give
security for the reasonable expenses, including attorney's fees, which may be incurred
by it in connection with such action and by the other parties defendant in connection
therewith for which the corporation may become liable under this article, under any
contract or otherwise under law, to which the corporation shall have recourse in such
amount as the court having jurisdiction of such action shall determine upon the termination
of such action. The amount of such security may thereafter from time to time be increased or decreased
in the discretion of the court having jurisdiction of such action upon showing that
the security provided has or may become inadequate or excessive.
Cite this article: FindLaw.com - New York Consolidated Laws, Banking Law - BNK § 6026. Security for expenses in stockholders' derivative action brought in the right of the corporation to procure a judgment in its favor - last updated January 01, 2021
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