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Business Litigation Minority Shareholders Business Disputes

Farrell Fritz, P.C.

Capital Call Cancelled: A Fairness Defense to the Majority’s Mandatory Capital Call

Farrell Fritz, P.C. on

There is perhaps no provision in an LLC operating agreement more susceptible to abuse than one allowing those in control of the LLC to make mandatory capital calls. For one, that authority often comes with very few...more

Farrell Fritz, P.C.

Can a Shareholder Be Oppressed After Ceding Control? Oppression, Reasonable Expectations, and Contractual Formalism

Farrell Fritz, P.C. on

One of the first business divorce cases that I participated in as a young litigator was a lengthy arbitration over whether a minority shareholder was oppressed under BCL 1104-a.  With those fond memories, evolution of the...more

Bradley Arant Boult Cummings LLP

My Partner Just Sued Me: Strategies Majority Owners Should Consider in Defending Claims Filed by Private Company Investors

Conflicts between co-owners in private companies are common, but the vast majority are worked out through dialogue and negotiation. When these internal conflicts cannot be resolved, however, minority investors may file suit...more

Farrell Fritz, P.C.

Bad Things Can Happen When You Steal a Business from a Minority Co-Owner

Farrell Fritz, P.C. on

Occasionally, we come across court cases in which the majority owners so egregiously mistreated their minority co-owners that it’s difficult not to write about it — if only as a lesson in what not to do to separate oneself as...more

Farrell Fritz, P.C.

Eastland Redux: Do Close Corporation Shareholders Have a Direct Claim Against Directors For Taking Disguised Distributions?

Farrell Fritz, P.C. on

Earlier this year, using as a springboard the Maryland intermediate appellate court’s decision in Eastland Food Corp. v Mekhaya, I posted about a topic on which there’s little or no New York law, viz., whether a complaint for...more

Farrell Fritz, P.C.

When Is It Too Late to Sue for Shareholder Oppression?

Farrell Fritz, P.C. on

Potential client sits down with business divorce lawyer and says, “I’m a minority shareholder in XYZ Corp. I’ve been completely frozen out by the majority. Can you help me?” The lawyer says, “Absolutely. New York law gives...more

Robson & Robson, P.C.

The Hazards of 'Weaponizing' Capital Call and Dilution Provisions

Robson & Robson, P.C. on

There are many ways that an owner of a closely-held business can use their superior financial resources to gain an advantage over their co-owners in a dispute. One common way is the use of a capital call provision to dilute...more

Farrell Fritz, P.C.

A Cross-Country Road Trip of Elections to Purchase in Dissolution Proceedings

Farrell Fritz, P.C. on

When a minority shareholder petitions for dissolution of a corporation on the grounds of oppressive or illegal conduct (see BCL 1104-a), Section 1118 of New York’s Business Corporation Law allows the corporation or any other...more

Robson & Robson, P.C.

Pennsylvania’s Alternative Path For Minority Shareholders Who Can’t Pass Federal Rule Of Civil Procedure 23.1’s “Adequate...

Robson & Robson, P.C. on

When shareholders of a company believe the leaders of the company have breached their fiduciary duties to it, they can bring a lawsuit against those leaders in one of two ways. Shareholders can bring the suit in their own...more

Farrell Fritz, P.C.

Minority Shareholder’s Petition to Dissolve Seltzer Business Loses Its Fizz

Farrell Fritz, P.C. on

In 1950, Sam Hoffman and his two sons, Hyman and Melvin, founded Brooklyn-based Cornell Beverages, Inc. to manufacture and distribute seltzer. Those were the days when “seltzer men” made weekly home deliveries of cases of...more

Farrell Fritz, P.C.

But What of the Equitable Accounting?

Farrell Fritz, P.C. on

I can’t say what the number is, but my own experience tells me that a significant percentage of lawsuits by a minority owner of a closely-held company against those in control of the company include a demand for an...more

Winstead PC

Litigating Minority Shareholder Rights - Presentation

Winstead PC on

David F. Johnson presented his paper “Business Divorce: Minority Shareholder Rights In Texas” to the State Bar of Texas’s Business Disputes Course on September 2-3, 2021. This presentation addressed shareholder oppression...more

Farrell Fritz, P.C.

Stop the Vote: Injunction Halts Shareholders Meeting Pursuant to Courts’ Broad Power to Review Corporate Elections

Farrell Fritz, P.C. on

The right of shareholders to elect a corporation’s directors is one of the most valuable rights attendant to share ownership.  Election of directors is where shareholders can directly exert their influence on the corporation,...more

Farrell Fritz, P.C.

Court Rejects Oppressed Shareholder’s Bid for Dissolution or Buy-Out, Finds Money Damages Sufficient

Farrell Fritz, P.C. on

A minority shareholder petitioning for dissolution under BCL § 1104-a must establish, by a preponderance of the evidence, that the majority shareholders have engaged in “illegal, fraudulent or oppressive actions,” (BCL §...more

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