Strike suit

A strike suit is a lawsuit of questionable merit[1] brought by a single person or group of people with the purpose of gaining a private settlement before going to court that would be less than the cost of the defendant's legal costs.[2] Such suits frequently appear where the defendant is a considerably larger entity than the plaintiff, such as a corporation or an estate.

Strike suits in securities law

Company shareholders sometimes use strike suits as a means of addressing perceived failures by or discontentment with the company while avoiding becoming embroiled in litigation themselves.

  • A minor shareholder sues a company for falling short on projected earnings. The lawsuit makes multiple technical claims of incompetence by the company.
  • A minor shareholder sues a company for failure to follow bylaws set by the company. The lawsuit makes multiple technical claims of bylaw infractions by the company.
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See also

References
  1. Badawi, Adam B.; Webber, David H. (2015). "Does the Quality of the Plaintiffs' Law Firm Matter in Deal Litigation?". The Journal of Corporation Law. 41 (2): 104. Retrieved 19 November 2019.
  2. Fox, Merritt B. "Required Disclosure And Corporate Governance". Law And Contemporary Problems. Retrieved 2008-10-15.
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