Shanghai Industry Co., Ltd. v. Zhou (Supervisory Representative Suit)
Where directors or senior managers use their positions to harm corporate interests, a supervisor has standing to bring suit in the company’s name under the statutory representative-action framework; where procedural thresholds are met, such actions are treated as actions to protect the company, with recovered recovery accruing to the company.
Holding
Where directors or senior managers use their positions to harm corporate interests, a supervisor has standing to bring suit in the company’s name under the statutory representative-action framework; where procedural thresholds are met, such actions are treated as actions to protect the company, with recovered recovery accruing to the company.
Issues
supervisory representative actiondiversion of company funds by executivesduty of loyalty of directors and managers