South Dakota
How Cohen v. Beneficial Indus. Loan Corp. applies in South Dakota: state-specific rules, key cases, and bar exam notes for Civil Procedure.
In South Dakota, the principles established in Cohen v. Beneficial Indus. Loan Corp. regarding corporate governance and shareholder rights are acknowledged, particularly in derivative actions. South Dakota law emphasizes the necessity of proper standing for shareholders in initiating derivative suits against corporate directors or officers.
In South Dakota, under SDCL § 47-29-59, a shareholder must be a beneficial owner of shares at the time of bringing a derivative action and must maintain ownership throughout the litigation, similar to the standing requirements articulated in Cohen.
The court reinforced that only shareholders with continuous ownership can pursue claims on behalf of the corporation.
This case emphasized the necessity for demand on the board before a derivative suit may proceed, aligning with federal guidelines.
The court held that a derivative action cannot proceed without a showing of demand futility, underscoring the procedural requirements from Cohen.
South Dakota’s application of Cohen’s principles aligns closely with federal standards, particularly regarding derivative actions requiring shareholder standing. However, South Dakota law has specific statutory provisions that may streamline certain procedural aspects compared to federal rules.
Understanding the requirements for bringing derivative actions in South Dakota is vital for the state bar exam, particularly regarding standing and demand futility criteria.