When Shareholders Can Bring Direct Claims In Cayman Court

Law360 (August 27, 2019, 1:42 PM EDT) -- This article considers two recent Cayman court decisions, David Xiaoying Gao v. China Biologic and Primeo Fund v. HSBC, which highlight the very limited situations in which a shareholder may bring a direct claim against a director or a third party and therefore the importance of ensuring that claims are commenced by the proper plaintiff.

Foss v. Harbottle[1] establishes the general rule that in any action in which a wrong is alleged to have been done to a company, the proper claimant is the company itself and no separate cause of action arises in favor of a shareholder. The shareholder’s loss...

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