The controlling shareholders of a corporation owe fiduciary duties to the minority shareholders by virtue of their ability to control the affairs of the company. Even when a merger complies with statutory requirements, where it benefits the controlling shareholders and does not have an apparent business purpose, it must also…
Buy-sell agreements, like a shotgun sale triggered by a deadlock, are the principal means by which the owners of closely held businesses protect against the worst consequences of deadlock. Commonly used shotgun provisions allow one party to set the price and allow the other party to decided whether to buy…
A limited liability company operating agreement may be amended informally by oral agreement or by a course of conduct. The party that claims amendment of an operating agreement by a course of conduct must establish the clear and mutual intent of the parties to agree to the amendment. A clear…
‘Business Divorce’ refers to disputes in which the owners of a closely held business, whether a corporation, limited liability company, partnership or limited partnership, must separate their business interests. In many cases, such as oppressed minority shareholder cases or oppressed LLC member cases, there are allegations that those in control…
In valuing the shares of a minority shareholder, a trial court must consider any valuation technique that is generally acceptable in the financial communities. Determining fair value is an art, not a science. Directors that hold a majority interest in a closely held business have a duty to deal fairly…
An oppressed minority shareholder was awarded approximately $750,000 in attorneys fees and expert expenses — some eight times the amount of the buyout — even though the majority had good reason to fire him from his position as the corporation’s CEO. Fee Award Under Oppressed Shareholder Statute to Selling Shareholder…
The general rule is that a court should not apply discounts for marketability or lack of control (the later known as the minority discount) unless there is some unfairness or wrongdoing among the parties. Still, in the world of oppressed minority shareholder litigation, there is always some allegation of wrongdoing,…
Here is the hard reality. The chances that your case, or any case, will get to a real trial on the merits is way less than one in 10. The truth is that only between two and five cases out of 100 will be resolved with a trial. What does…
It is not unusual that a dispute between the owners of a closely held business also involves a dispute about the authority of one of the owners to act as agent for the entity. We had a recent case, for example, in which a central issue was whether the manager…
Few of us have the liquidity that we need to contemplate the divorce while we are making plans to get marriedIt just doesn’t enter our minds at the time and, of course, when if it does later become an issue, it is way too late to come to an easy…