The Disinterested Person: An Alternative Approach to Shareholder Derivative Litigation

Recently I had the opportunity to apply an unused procedure in a shareholder derivative litigation. In 1989 Michigan amended its Business Corporation Act to allow a court under specified circumstances to appoint a "disinterested person" to perform fact gathering functions similar to those of a German investigative judge. In 1991 I was appointed to be the disinterested person in a derivative litigation involving Rospatch Corporation. The experience persuaded me that compared to litigation and the special litigation committee, the disinterested person approach may often have significant advantages in terms of reduction of litigation costs, procedual fairness, and protection of shareholders.