The court may order payment of derivative-proceeding expenses in certain cases when the proceeding ends.
Sec. 21.561. PAYMENT OF EXPENSES. (a) In this section, "expenses" means reasonable expenses incurred by a party in a derivative proceeding, including: (1) attorney's fees; (2) costs in pursuing an investigation of the matter that was the subject of the derivative proceeding; or (3) expenses for which the corporation may be required to indemnify another person. (b) On termination of a derivative proceeding, the court may order: (1) the corporation to pay expenses the plaintiff incurred in the proceeding if the court finds the proceeding has resulted in a substantial benefit to the corporation; (2) the plaintiff to pay expenses the corporation or other defendant incurred in investigating and defending the proceeding if the court finds the proceeding has been instituted or maintained without reasonable cause or for an improper purpose; or (3) a party to pay expenses incurred by another party relating to the filing of a pleading, motion, or other paper if the court finds the pleading, motion, or other paper: (A) was not well grounded in fact after reasonable inquiry; (B) was not warranted by existing law or a good faith argument for the application, extension, modification, or reversal of existing law; or (C) was interposed for an improper purpose, such as to harass, cause unnecessary delay, or cause a needless increase in the cost of litigation. Text of subsection as added by Acts 2025, 89th Leg., R.S., Ch. 21 (S.B. 29), Sec. 15 (c) For purposes of Subsection (b), a substantial benefit to the corporation does not include additional or amended disclosures made to the shareholders, regardless of materiality. Text of subsection as added by Acts 2025, 89th Leg., R.S., Ch. 199 (S.B. 2411), Sec. 28 (c) For purposes of Subsection (b)(1), substantial benefit to the corporation does not include additional or amended disclosures made to the shareholders, regardless of materiality. Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006. Amended by: Acts 2019, 86th Leg., R.S., Ch. 899 (H.B. 3603), Sec. 10, eff. September 1, 2019. Acts 2025, 89th Leg., R.S., Ch. 21 (S.B. 29), Sec. 15, eff. May 14, 2025. Acts 2025, 89th Leg., R.S., Ch. 199 (S.B. 2411), Sec. 28, eff. September 1, 2025.