Final answer:
In a shareholder derivative lawsuit, the recovery typically goes to the corporation itself rather than the individual shareholders. The lawsuit is brought by a shareholder on behalf of the corporation, alleging harm to the corporation caused by the actions of the directors or officers. Therefore, individual shareholders are not entitled to a direct recovery.
Step-by-step explanation:
In a shareholder derivative lawsuit, the recovery typically goes to the corporation itself rather than the individual shareholders. This is because the lawsuit is brought by a shareholder on behalf of the corporation, alleging harm to the corporation caused by the actions of the directors or officers. Any recovery obtained in the lawsuit, such as monetary damages or changes in corporate governance, will benefit the corporation as a whole.
For example, if a shareholder sues the corporation's board of directors for breach of fiduciary duty, any damages awarded would be paid to the corporation, not the individual shareholders. The goal of a shareholder derivative lawsuit is to hold the directors or officers accountable and protect the interests of the corporation.
Therefore, while individual shareholders may indirectly benefit from the recovery if it leads to improved corporate performance or governance, they are not entitled to a direct recovery.