180.0744(1)(1) The court shall dismiss a derivative proceeding on motion by the corporation if the court finds, subject to the burden of proof assigned under sub. (5) or (6), that one of the groups specified in sub. (2) or (6) has determined, acting in good faith after conducting a reasonable inquiry upon which its conclusions are based, that maintenance of the derivative proceeding is not in the best interests of the corporation.

180.0744(2) (2) Unless a panel is appointed under sub. (6), the determination in sub. (1) shall be made by any of the following:

180.0744(2)(a) (a) A majority vote of independent directors present at a meeting of the board of directors if the independent directors constitute a quorum.

180.0744(2)(b) (b) A majority vote of a committee consisting of 2 or more independent directors appointed by majority vote of independent directors present at a meeting of the board of directors, whether or not the voting, independent directors constitute a quorum.

180.0744(3) (3) Whether a director is independent for purposes of this section may not be determined solely on the basis of any one or more of the following factors:

180.0744(3)(a) (a) The nomination or election of the director by persons who are defendants in the derivative proceeding or against whom action is demanded.

180.0744(3)(b) (b) The naming of the director as a defendant in the derivative proceeding or as a person against whom action is demanded.

180.0744(3)(c) (c) The approval by the director of the act being challenged in the derivative proceeding or demand if the act resulted in no personal benefit to the director.

180.0744(4) (4) If a derivative proceeding is commenced after a determination was made rejecting a demand by a shareholder or beneficial owner, the complaint shall allege with particularity facts establishing any of the following:

180.0744(4)(a) (a) That a majority of the board of directors did not consist of independent directors at the time that the determination was made.

180.0744(5) (5) If a majority of the board of directors did not consist of independent directors at the time that the determination rejecting a demand was made, the corporation shall have the burden of proving that the requirements of sub. (1) have been met. If a majority of the board of directors consisted of independent directors at the time that the determination was made, the shareholder or beneficial owner shall have the burden of proving that the requirements of sub. (1) have not been met.

180.0744(6) (6) Upon motion by the corporation, the court may appoint a panel of one or more independent persons to determine whether maintenance of the derivative proceeding is in the best interests of the corporation. If a panel is appointed under this subsection, the shareholder or beneficial owner shall have the burden of proving that the requirements of sub. (1) have not been met.

180.0744 Annotation A special litigation committee formed under sub. (2) (b) shall be examined carefully by a circuit court to determine whether its members are independent. The test is whether a committee member has a relationship with a defendant or the corporation that would be reasonably expected to affect the member's judgment with respect to litigation in issue. Einhorn v. Culea, 2000 WI 65, 235 Wis. 2d 646, 612 N.W.2d 78, 97-3592.

180.0745 180.0745 Discontinuance or settlement. A derivative proceeding may not be discontinued or settled without the court's approval. If the court determines that a proposed discontinuance or settlement will substantially affect the interests of the beneficial owners, the shareholders or a class of shareholders of the domestic corporation or foreign corporation, the court shall direct that notice be given to the shareholders and beneficial owners affected.

180.0746 180.0746 Payment of expenses. On termination of the derivative proceeding, the court may do any of the following:

180.0746(1) (1) Notwithstanding s. 814.04 (1), order the domestic corporation or foreign corporation to pay the plaintiff's reasonable expenses, including attorney fees, incurred in the derivative proceeding by the shareholder or beneficial owner who commenced or maintained the derivative proceeding if the court finds that the derivative proceeding has resulted in a substantial benefit to the domestic corporation or foreign corporation.

180.0746(2) (2) Order the shareholder or beneficial owner who commenced or maintained the derivative proceeding to pay any defendant's reasonable expenses, including attorney fees, notwithstanding s. 814.04 (1), incurred in defending the derivative proceeding if it finds that the derivative proceeding was commenced or maintained without reasonable cause or for an improper purpose.

180.0747 180.0747 Applicability to foreign corporations. In any derivative proceeding in the right of a foreign corporation, the matters covered by ss. 180.0741, 180.0742 and 180.0744 shall be governed by the laws of the jurisdiction of incorporation of the foreign corporation.