Motion to Dismiss Shareholder Derivative Claims

MOTION TO DISMISS SHAREHOLDER DERIVATIVE CLAIMS AND MALICIOUS PROSECUTION CLAIM, OR ALTERNATIVELY, TO SEVER AND TRANSFER MALICIOUS PROSECUTION CLAIM

VS.

DEFENDANTS

MOTION TO DISMISS SHAREHOLDER DERIVATIVE CLAIMS
AND MALICIOUS PROSECUTION CLAIM, OR ALTERNATIVELY,
TO SEVER AND TRANSFER MALICIOUS PROSECUTION CLAIM

COME NOW Defendants, and (hereinafter collectively the (""), by and through their attorney of record, and file this their Motion to Dismiss Shareholder Derivative Claims and Malicious Prosecution Claim, or Alternatively, to Sever and Transfer Malicious Prosecution Claim and in support thereof, would respectively show unto the Court the following:

1.

Plaintiff filed this civil action on or about . As set forth in paragraph 1 of Plaintiff's complaint the nature of this proceeding is a shareholder's derivative action pursuant to Miss. Code Ann. §79-4-7.40 (Supp. 1994) and is based on the allegation that the have, as officers and/or directors, used their positions improperly to gain benefit for themselves as shareholders to the exclusion of Plaintiff. In addition, Plaintiff also seeks an accounting of the business affairs of the corporation and a temporary restraining order, preliminary injunction and permanent injunction to prevent dissipation of the assets of the corporation to the detriment of the Plaintiff.

2.

Plaintiff is not qualified to commence or maintain a derivative proceeding because he/she does not fairly and adequately represent the interest of the corporation in enforcing the rights of the corporation as required by Miss. Code Ann. §79-4-7.41 (Supp. 1994). Plaintiff was a director of the corporation during the time that substantially all of the actions of which he/she is now complaining occurred; yet he/she never objected or dissented to any such actions. In addition, although Plaintiff is a percent (%) shareholder of the corporation, he/she was also employed by the corporation, and after being discharged for cause, stated to and others that it was in his/her intention to do everything possible to destroy the corporation and cause as much pain and suffering as possible.

3.

The provisions of Miss. Code Ann. §79-4-7.42 specifically provide the following:

No shareholder may commence a derivative proceeding until:

(1) A written demand has been made upon the corporation to take suitable action; and

(2) () days have expired from the date the demand was made unless the shareholder has earlier been notified that the demand has been rejected by the corporation, or unless irreparable injury to the corporation would result by waiting for the expiration of the () day period.

Plaintiff has never made any written demand on the corporation to take suitable action regarding the allegations in his/her Complaint, despite the clear and unambiguous language of Miss. Code Ann. §79-4-7.42 (Supp. 1994) making such written demand a mandatory prerequisite. Because the written demand was never made, it is obvious that the -day period required by Miss. Code Ann. §79-4-7.42 has not expired. Moreover, even if the written demand had been made, the Plaintiff has not shown that irreparable injury to the corporation would occur as a result of waiting for the expiration of the 90-day period. Plaintiff has failed to comply with the compulsory prerequisites of Miss. Code Ann. §79-4-7.42 (Supp. 1994) and it is incumbent upon the Court to dismiss Plaintiff's derivative claims.

4.

Pursuant to Miss. Code. Ann. §79-4-7.46 (Supp. 1994), the are entitled to an award of its reasonable expenses, including attorneys fees incurred in defending against Plaintiff's derivative claims.

5.

In his/her Complaint, Plaintiff asserts an apparent claim for malicious prosecution. The allegations related to this claim are contained in paragraphs 41 and 42 of the Complaint and is designated as Count IX. However, Plaintiff's prayer for relief makes no specific request for any relief under this claim. Nevertheless, this claim appears to be based on a tort allegedly committed by in his/her individual capacity.

6.

Plaintiff's complaint fails to state a claim for malicious prosecution against , in his/her individual capacity and should be dismissed pursuant to Rule 12 (b)(6) of the Mississippi Rules of Civil Procedure. The criminal affidavit filed by was done on behalf of the corporation, in accordance with duty and obligation, as President of the corporation, to protect and conserve the corporations' assets. At all times relevant to the criminal prosecution of Plaintiff, was acting on behalf of the corporation and within the scope of his/her authority as President of the corporation.

7.

Moreover, Plaintiff cannot establish that probable cause did not exist for filing the criminal proceeding. A preliminary hearing on the charges were held in the Municipal Court of , Mississippi and the Honorable found that there existed sufficient probable cause for the charges to bind the matter over to the County grand jury. The assertion that the

grand jury allegedly returned a no bill on the charge is not sufficient to establish a claim of malicious prosecution.

8.

Alternatively, the move this Court to sever Plaintiff's claim for malicious prosecution from Plaintiff's other claims and transfer said malicious prosecution claim to the Circuit Court of County, Mississippi. Plaintiff's malicious prosecution claim is clearly based on an alleged tort and is the type of matter traditionally handled by circuit courts. Moreover, the should have the option of availing themselves of their right to jury trial on this matter should they so desire, and this option is only available to them in Circuit Court. As a matter of fairness and

WHEREFORE, PREMISES CONSIDERED, the move the Court to dismiss Plaintiff's shareholder derivative claims and award the their reasonable expenses, including attorney fees, incurred in connection with defending said claims. Further, the move the Court dismiss Plaintiff's claim for malicious prosecution against in his/her personal capacity for failure to state a claim upon which relief can be granted, pursuant to Rule 12 (b)(6) of the Mississippi Rules of Civil Procedure. Alternatively, the move the Court to sever Plaintiff's claim of malicious prosecution and transfer said claim to the Circuit Court of County, Mississippi.

DATED, this the day of ,

Respectfully submitted,

Attorney for

Of counsel:

Telephone:

MSB #:

Attorney for

CERTIFICATE OF SERVICE

This is to certify that I, , Attorney for Plaintiff, have mailed this day, by U.S. Mail, postage fully prepaid, a copy of the above and foregoing document to , Attorney for Plaintiff.

This the day of ,