State Codes and Statutes

State Codes and Statutes

Statutes > Nebraska > Chapter21 > 21-168

21-168. Special litigation committee.(ULLCA 905) (a) If alimited liability company is named as or made a party in a derivative proceeding,the company may appoint a special litigation committee to investigate theclaims asserted in the proceeding and determine whether pursuing the actionis in the best interests of the company. If the company appoints a speciallitigation committee, on motion by the committee made in the name of the company,except for good cause shown, the court shall stay discovery for the time reasonablynecessary to permit the committee to make its investigation. This subsectiondoes not prevent the court from enforcing a person's right to informationunder section 21-139 or, for good cause shown, granting extraordinary reliefin the form of a temporary restraining order or preliminary injunction.(b) A special litigationcommittee may be composed of one or more disinterested and independent individuals,who may be members.(c)A special litigation committee may be appointed:(1) in a member-managed limitedliability company:(A)by the consent of a majority of the members not named as defendants or plaintiffsin the proceeding; and(B)if all members are named as defendants or plaintiffs in the proceeding, bya majority of the members named as defendants; or(2) in a manager-managed limitedliability company:(A)by a majority of the managers not named as defendants or plaintiffs in theproceeding; and(B)if all managers are named as defendants or plaintiffs in the proceeding, bya majority of the managers named as defendants.(d) After appropriate investigation,a special litigation committee may determine that it is in the best interestsof the limited liability company that the proceeding:(1) continue under the control ofthe plaintiff;(2)continue under the control of the committee;(3) be settled on terms approvedby the committee; or(4)be dismissed.(e)After making a determination under subsection (d) of this section, a speciallitigation committee shall file with the court a statement of its determinationand its report supporting its determination, giving notice to the plaintiff.The court shall determine whether the members of the committee were disinterestedand independent and whether the committee conducted its investigation andmade its recommendation in good faith, independently, and with reasonablecare, with the committee having the burden of proof. If the court finds thatthe members of the committee were disinterested and independent and that thecommittee acted in good faith, independently, and with reasonable care, thecourt shall enforce the determination of the committee. Otherwise, the courtshall dissolve the stay of discovery entered under subsection (a) of thissection and allow the action to proceed under the direction of the plaintiff. SourceLaws 2010, LB888, § 68.Operative Date: January 1, 2011