Minority Shareholders

News & Analysis as of

Updates on Public Company GMS and shareholders reporting

On March 14, 2017, the Indonesian Financial Services Authority (Otoritas Jasa Keuangan or "OJK") issued two regulations impacting voting rights at a General Meeting of Shareholders of Public Companies ("GMS") and transparency...more

Episode 10: The Marketability Discount Revisited: Interview with Greg Barber [Audio]

The marketability discount as applied in New York fair value proceedings remains a hot topic in business valuation and legal circles. In this episode, I interview business appraiser Greg Barber of Barber Analytics who...more

Business Litigation Alert: "Legislative Update: Is There a Future to Minority Shareholder Oppression in Texas?"

“Minority shareholder oppression” is a legal claim that occurs when the majority shareholders in a closely held corporation engage in “oppressive” action that unfairly prejudices the minority shareholder’s interests. In...more

If You Lose A Minority Shareholder Oppression Lawsuit, Things Will Likely Get Worse – So Do It Right

When minority shareholders in New Jersey (including LLC members) are being treated unfairly or oppressively, the New Jersey minority shareholder oppression statute provides significant rights that are written about quite...more

How An Employee/Shareholder Can Protect Oneself Against Oppression

Because termination of one’s employment does not necessarily equate to shareholder oppression under New Jersey law, as seen in my last post, it is often a good idea to take proactive measures to inoculate yourself against a...more

Termination of Employment as Minority Shareholder Oppression

A common theme among minority shareholders seeking legal representation is termination of employment. Readers of this blog may be aware that termination can often constitute minority shareholder oppression, warranting a...more

Business Appraisers Spar Over Tax Rates, Market Approach and Other Key Issues in Fair Value Buy-Out Case

As promised in the postscript to last week’s post about the appellate ruling in the Gould case, affirming Justice Platkin’s order granting the oppressed minority shareholder’s dissolution petition involving a pair...more

An Oppression How-To: Revoke Employment, Profit Sharing and Control

An earlier post on this blog, examining a post-trial decision in Matter of Digeser v Flach, 2015 NY Slip Op 51609(U) [Sup Ct Albany County Nov. 5, 2015], described the minority shareholder’s dissolution claim under Section...more

Winter Case Notes: De Facto Partnership and Other Recent Decisions of Interest

Welcome to another edition of Winter Case Notes in which I clear out my backlog of recent court decisions of interest to business divorce aficionados by way of brief synopses with links to the decisions for those who wish to...more

Rolling Over Target Equity Into A PE Fund: Part II

Roll-Over: Tax Issue - Picking up on yesterday’s discussion, how can a PEF reconcile its preference to acquire a depreciable or amortizable basis for its target’s assets while, at the same time, affording the target’s...more

Rolling Over Target Equity Into A PE Fund: Part I

For many business owners, the final step of a successful career may be the sale of their business. At that point, the investment into which the owners have dedicated so much time, effort and money is liquidated, leaving them...more

Many Discovery Tools Exist To Find Emails To Prove Shareholder Oppression

I have noted many times on this blog that emails often prove shareholder oppression cases. It can be fairly easy for majority shareholders who are careful, and seek legal advise beforehand, to mask their true intent when...more

Commercial Division Grants Preliminary Injunction in Shareholder Dispute

On January 6, 2017, Justice Charles E. Ramos of the Commercial Division issued an order enjoining two corporations from taking action in violation of a shareholders agreement of a third company. The case, Ciment v. SpanTran,...more

Choice of Entity and Key Contents of Organization Documents

Five Business Entity Forms: • Corporation • General Partnership • Limited Partnership • Limited Liability Partnership (“LLP”) • Limited Liability Company (“LLC”) Please see full presentation publication...more

Can a Minority Shareholder Force the Majority to Buy Their Interest?

The question often arises whether a minority shareholder can require the majority to buy his interest in a privately held company. The answer, as a general matter, is that absent an agreement that provides for the purchase,...more

Some Pitfalls of Negotiating Your Own Buyout in a Business Divorce

More and more shareholder dispute litigations are settling earlier than ever before, which is obviously a good thing for anyone who does not want to pay a fortune in legal fees (i.e., everyone). The reason is simple – in all...more

LLC Operating Agreement Does Not Prevent Freeze-Out Merger

On October 24, 2016, Justice Charles E. Ramos of the New York Commercial Division denied a motion by minority members of a limited liability company (“LLC”) to enjoin a freeze-out merger that would cash out the minority...more

"Recent Opinions Highlight Different Appraisal Valuation Methods Employed in Merger Transactions by Delaware Courts"

There is a general perception that statutory appraisal challenges have been on the rise over the past several years. The Delaware Court of Chancery has issued a number of opinions during that time that use the merger price...more

"Two Court of Chancery Deal Litigation Decisions Provide Helpful Guidance"

Chelsea Therapeutics: Post-Closing Bad Faith Claim a ‘Rare Bird’ in Delaware Absent Allegations of Self-Interestedness or Lack of Independence - In In re Chelsea Therapeutics International LTD Stockholders Litigation,...more

When Can a Bondholder Insist on Prompt Payment of Principal or Interest: Recent Developments under the Trust Indenture Act

In December 2014 and January 2015, the United States District Court for the Southern District of New York issued two sets of decisions — Marblegate Asset Mgmt. v. Educ. Mgmt. Corp. and MeehanCombs Global Credit Opportunities...more

Minority shareholdings: New competition law issues?

New competition law issues with respect to minority shareholdings? A topic that recently became prominent in the competition law community and beyond is whether so-called “common ownership” may have a negative effect on...more

Court Rules Coequal Stockholders Owe Fiduciary Duties To Each Other

Stockholders in closely held corporations often operate their companies as if they were partnerships. Does that mean that the stockholders, like partners, owe fiduciary duties to each other?...more

Baker v Sadiq C.A. No. 9464-VCL (Del. Ch. Aug. 16, 2016) (Laster, V.C.)

In this letter opinion, the Court of Chancery awarded $650,000 in attorney’s fees to counsel for the minority stockholders of NavSeeker, Inc. (“NavSeeker”), resolving a dispute regarding how a fee award should be determined...more

What To Do If Filing Shareholder Dispute Litigation Might Potentially Harm The Company

To negotiate – or to sue? That is the question when the decision to sue might potentially hurt the company. A minority shareholder (or LLC member) in New Jersey is often faced with a difficult choice. Confronted with...more

Delaware Law Updates – Court of Chancery Puts Boards of Directors on Notice that Contracting Away Derivative Claims in a Merger...

Vice Chancellor Glasscock has held that a merger designed to eliminate derivative claims against a majority of directors justified the application of the entire fairness standard of review in a direct challenge to the merger....more

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