Direct Claim | Practical Law

Direct Claim | Practical Law

Direct Claim

Direct Claim

Practical Law Glossary Item 0-383-2768 (Approx. 2 pages)

Glossary

Direct Claim

A litigation claim brought by a holder of ownership interests in an entity (such as a stockholder in a corporation or a member in a limited liability company) against the management or board of directors of the entity on behalf of itself alleging an injury to the interest holder in particular (as opposed to an injury to the entity). Since a direct claim does not have the procedural burdens of a derivative claim, it is easier for an interest holder to survive a motion to dismiss if it is alleging a direct claim.