Special litigation committees come up in
derivative lawsuits. So actions in which
the harm is to the corporation
first and any harm to the shareholders
would be derivative of that or would
flow from that as their rights as a
shareholder. And so a special litigation
is an independent committee. It can be
one or more um independent individuals
that investigate the allegations and the
facts that have been made and then that
special litigation committee makes a
recommendation
that has to be followed by the court if
the special litigation committee is
independent and they’ve conducted a
thorough investigation. The concept
really behind it is to derivative
actions can be expensive for
corporations. And so a special
litigation committee looks at this looks
at the derivative claims as though it’s
sitting in the shoes of the board and
trying to make a decision that’s in the
best interest of the corporation as a
whole.