DONNER MANAGEMENT COMPANY v. MICHAEL Part II
When, at the commencement of a derivative lawsuit, a shareholder-plaintiff voluntarily posts security under Corporations Code Sec. 800, a prevailing defendant seeking attorney fees at the conclusion of the lawsuit need not retrospectively show the lawsuit had no reasonable possibility of benefiting the corporation. In shareholder derivative suit that was dismissed without prejudice, the practical definition of prevailing party applies with respect to award of attorney fees. Where shareholder-plaintiff dismissed suit without prejudice after special litigation committee composed of newly elected board of directors decided that it was not in the company's best interest to proceed with suit, defendant was the prevailing party for purposes of awarding attorney fees.
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