Monthly Archives: January 2016

Arizona Rule of Civil Procedure 23.1 governs certain pleading requirements for a shareholder derivative action.  In a recent Superior Court decision, the judge found that a minority shareholder could sue both derivatively and directly where the shareholder alleged that the two man closely, held corporation operated in practice as a partnership.  The court relied upon Johnson v. Gilbert, 127 Ariz. 410, 412, 621 P.2d 916, 918 (App. 1980) in which it is stated that where a closely held corporation “operated more as partners than in strict compliance with the corporate form,” standing existed to sue both directly and derivatively.  The court did not require the shareholder to follow the formal requirements of 23.1.