concurring:

I concur in Judge Farris’ opinion. I write separately to suggest that although the plaintiff had no standing to maintain a derivative suit, individually or on behalf of a class, he may not be, or have been, as the case may be, foreclosed from seeking recovery based upon a direct claim against the defendants. 1

Pursuit of a derivative cause of action by a shareholder is possible only if the shareholder ownership requirement is satisfied throughout the duration of the suit. In this case, the plaintiff, having received the monetary value for his shares as the result of the transaction approved by a majority of the shareholders, does not satisfy that requirement. The plaintiff, therefore, has no standing to assert a derivative cause of action.

The plaintiff seeks to salvage his derivative action by requesting leave to amend his complaint under Fed.R.Civ.P. 15(a) to transform it into a class action. Although a motion for leave to amend the complaint is properly within the discretion of the district court, “the court may deny leave to amend where the proposed amendment fails to allege facts which would support a valid theory of liability.” Verhein v. South Bend Lathe, Inc., 598 F.2d 1061, 1063 (7th Cir. 1979). Accord Pan-Islamic Trade Corp. v. Exxon Corp., 632 F.2d 539, 546 (5th Cir. 1980) , cert. denied, 454 U.S. 927 , 102 S.Ct. 427 , 70 L.Ed.2d 236 (1981). That is the case here. See Klamath-Lake Pharmaceutical Assoc. v. Klamath Medical Service Bureau, 701 F.2d 1276 , 1292-93 (9th Cir.1983); Smith v. Commanding Officer, Air Force Accounting, 555 F.2d 234, 235 (9th Cir.1977). The plaintiff’s theory of recovery is that a “class action should be permitted to continue to prosecute the [derivative] claim herein for the benefit of those shareholders since they did not receive any consideration for the claims herein.” Plaintiff’s Opposing Affidavit, Feb. 18, 1982, at 10. Having no standing the plaintiff is not a proper representative plaintiff. A derivative theory of recovery, whether asserted individually or on behalf of a class, is governed by Fed.R. Civ.P. 23.1. See C. Wright, Law of Federal Courts 488 (4th ed. 1983). Thus, the district court properly denied the motion for leave to amend the complaint.

Our decision, however, does not preclude actions based upon direct theories of recovery. If such actions are precluded it is on other grounds. An action asserting a direct claim based upon common law or securities law principles might lie. If the plaintiff did not receive fair value for his shares in the asset sale and liquidation transaction, he should have pursued a direct cause of action *1051 against the defendants. Under common law, majority shareholders owe a fiduciary duty to minority shareholders who are squeezed out in a transaction. Passim F. O’Neal, Oppression of Minority Shareholders (1975). And under federal law, false and misleading statements made in connection with any proxy solicitation are actionable under section 14 of the Securities Exchange Act of 1934, 15 U.S.C. § 78n (1976), see H. Henn & J. Alexander, Laws of Corporations § 297 (3d ed. 1983) (describing proxy regulation); while fraudulent schemes in connection with the sale or purchase of any security are actionable under section 10(b) and rule 10b-5, 15 U.S.C. § 78j(b) (1976). See H. Henn & J. Alexander, supra, § 298 (describing antifraud provisions).

A plaintiff who asserts such a claim may assert it individually or on behalf of a class, although a class action is usually preferable. See A. Bromberg & L. Lowenfels, Securities Fraud & Commodities Fraud § 4.7(120), at 84.4 (1981) (“Class actions ... may be the only practical way to attack squeezeouts and similar conflict transactions, especially if state derivative rights are extinguished by the transaction .... ”).

Subject to these observations, I concur in the opinion of Judge Farris.

. The plaintiffs ability to bring an action based upon a direct theory of recovery may be barred by limitations.