...Legal Circumstances in Which Independence Is Important -
The "business-judgment rule" is a presumption that in making business decisions the directors or managers acted or chose not to act on an informed basis, in good...more
The Foregoing -
In March 2018, Blake B. Hartman, a founder of BigInch Fabricators & Construction Holding Company, was involuntarily terminated as an director and officer. The involuntary termination triggered the...more
Once it is understood that "fair value" is not the same as "fair market value," there appears to be two general views of what is "fair value" in the context of breach of fiduciary duty or shareholder oppression cases. For...more
In any appraisal, whether conducted as a result of a breach of fiduciary duty or oppression, the date of valuation has to be established. In fact, after establishing the definition of "fair value" to apply, the determination...more
The prior discussion, Determining a Remedy After Oppression or Breach of Fiduciary Duty (Part 4), presented a listing of the potential remedies on a finding of a breach of duty and oppression. Frequently, the animosity among...more
Once the court finds that oppression and/or a breach of fiduciary duty has occurred, it has to determine a remedy.
Either by statute or within its equitable authority, the court may offer many alternative remedies...more
The same conduct that can result in a breach of fiduciary duty of those in control to a minority shareholder will often support a claim for oppression. See Part 2 of the Current Issues in Closely Held Businesses Series,...more
Was the removal of an shareholder-employee as an officer an employment claim or a breach of duty and shareholder oppression?
When disputes develop and interests among owners diverge, a shareholder-employee may have his...more
During the COVID-19 pandemic and shelter-in-place orders, many topics arose related to disputes among members of closely held businesses. When the interests of the owners diverge and litigation results, a variety of issues...more
Case Study: Trans Perfect Global, Inc.
Philip Shawe v. Elizabeth Elting, Delaware Supreme Court, February 13, 2017 -
TransPerfect is a successful global translation business founded by two college friends, Philip...more
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
A recent article in the Real Property, Trust and Estate Law Journal [Volume 50, Number 2, Fall 2015] discussed the phenomena of grantors of trusts "increasingly naming trust protectors, particularly for a trust that may...more
On June 17, the Attorneys for Family Held Enterprises (AFHE) held a midyear conference in New York City. The agenda began with an interactive presentation titled "Understanding Conflicts of Interest and Current Events in the...more
Two recent high-profile shareholder rights cases in the Delaware Chancery Court have received a lot of attention due to the money that is at stake and the individuals in the disputes. These two cases, along with several other...more
In dissenters' rights actions, shareholder oppression and member disputes as well as in breach of fiduciary duty cases, the fair value of a company becomes center stage for debate. As shareholders and companies keep an eye...more
Rollins v. Rollins, a recent breach of trust and fiduciary duty case, addressed interesting issues at the appellate level regarding the dilemma that can ensue when two older family members are selected as trustees of a trust...more
Family business disputes oftentimes uncover who is actually calling the shots and making a big difference in the profitability of a company. As described in previous Shareholder Rights blogs, the Wisniewski shareholder...more
Life insurance and irrevocable trusts are great tools to ease family business succession issues and mitigate exposure to shareholder oppression and disputes. Irrevocable life insurance trusts (ILIT), in particular, play an...more
10/1/2013
In shareholder rights disputes that result in a judicial appraisal proceeding, the date of value is a critical topic. Business values can fluctuate during the course of attempting to resolve a dispute or during litigation....more
9/23/2013
Wisniewski v. Walsh, an interesting unpublished decision by a New Jersey appellate court, involves more than 10 years of a family dispute over a business. The litigation covers a wide range of issues, including how siblings,...more
Many people ask, "What duties are owed to a family member who has an interest in the business?" Before getting into this important topic, it is critical to understand the legal nuances of a particular jurisdiction. A wide...more
Trustees holding interests in family enterprises may have conflicting duties to the beneficiaries as well as unrelated shareholders and members of the business. ...more