In the TVW Corporation case, which combination of suits may X file regarding pre-emptive rights and voting rights?

• A. Derivative suit for pre-emptive rights and voting rights
• B. Representative suit for pre-emptive rights and voting rights
• C. Representative suit for pre-emptive rights, and individual suit for voting rights
• D. Individual suit for pre-emptive rights, and representative suit for voting rights

Answer: (D)

The key idea is that different shareholder rights are best protected by different types of suits depending on whether the right is personal or collective. Pre-emptive rights are a personal entitlement of each stockholder to subscribe to new shares in order to maintain their ownership percentage. Because this right belongs to the individual holder, enforcement is typically pursued via an action brought by the affected shareholder in their own name. It’s about protecting a specific, individual interest rather than a class-wide harm.

Voting rights, on the other hand, can affect a large group of stockholders in a common way, especially if there’s a broader issue with how votes are conducted or counted. When a common injury to the class is involved, a representative suit (a class-action style action) allows one or more representatives to sue on behalf of all holders to secure relief that benefits the entire group.

Derivatives suits are aimed at injuries to the corporation itself due to mismanagement or similar wrongs, not directly at the personal rights of stockholders like pre-emptive or voting rights. So the best pairing is an individual suit for pre-emptive rights and a representative suit for voting rights.