Dealing with Your Shareholder Dispute
Shareholder disputes can arise for many reasons - disagreement over company strategy, concerns about mismanagement of funds, disputes between majority and minority shareholders, or simple personality conflicts. These disputes can hamper decision-making, impact company performance, and even bring operations to a standstill.
Our commercial litigation attorneys have extensive experience dealing with complex shareholder disputes. We understand the many legal issues involved and can help you reach a fair resolution. Call the Davis Bucco & Makara team today at 610-238-0880 to help with your case.
1. We Offer Mediation Services
Mediation is often the best first step for resolving a shareholder dispute. An independent mediator helps shareholders communicate, identify issues, and explore solutions. Mediation is voluntary, confidential, and less adversarial than litigation. Our mediators are highly trained in business law and can guide you to a mutually agreeable settlement. Mediation preserves business relationships and avoids high litigation costs.
2. We Handle Shareholder Oppression Claims
Majority shareholders have a fiduciary duty not to use their control in an unfairly prejudicial manner against minority shareholders. If you feel the majority is acting oppressively, we can file a shareholder oppression lawsuit to protect your rights. Oppression claims often arise when the majority makes decisions that benefit themselves at the minority's expense or locks the minority out of management. Our commercial litigation lawyers will aggressively fight to stop the improper conduct.
3. We Deal with Breach of Fiduciary Duty
Shareholders, directors, and officers have fiduciary duties requiring them to act in the company's best interests. Breaches of these duties, such as misappropriating funds or engaging in interested transactions, can give rise to shareholder disputes. Our shareholder dispute lawyers are highly experienced at investigating and proving breach of fiduciary duty claims. We pursue damages and other remedies to hold the wrongdoers accountable.
4. We Handle Shareholder Derivative Actions
Shareholders can bring a derivative lawsuit on behalf of the company against officers, directors or third parties who caused injury to the company. Common derivative claims include breach of fiduciary duty, corporate waste, insider trading or oppression of minority shareholders. Our skilled business litigation attorneys know how to successfully plead and prove shareholder derivative claims.
5. We Assist with Shareholder Buyouts
When relations between shareholders break down completely, often the best solution is a buyout of one shareholder's interests by the other(s). This severs the relationship and gives the selling shareholder a fair value for their shares. We guide clients through the shareholder buyout process, including valuation, structuring the deal, and preparing the buyout agreements.
6. We Handle Court-Ordered Buyouts
If shareholders are deadlocked and unable to reach a buyout agreement, either side can request the court to order a buyout. The court will determine a fair buyout price and terms. Our litigators are deeply familiar with the statutory requirements and procedures for court-ordered buyouts. We advocate aggressively to ensure you receive full and fair compensation for your shares.
7. We Litigate Shareholder Disputes
When other resolution methods fail, we are fully prepared to litigate shareholder disputes in court. Our experienced business trial lawyers handle claims for breach of fiduciary duty, shareholder oppression, corporate dissolution, and other complex commercial litigation matters involving shareholders rights. We are known for our aggressive and strategic advocacy, securing favorable verdicts and settlements for our shareholder clients.
FAQs About Shareholder Disputes
What are the most common causes of shareholder disputes?
The most common causes are disagreements over company strategy and decisions, concerns about mismanagement or corporate waste, disputes between majority and minority shareholders, and personal conflicts or animosity between shareholders.
What are the fiduciary duties owed by shareholders?
Majority shareholders have a fiduciary duty not to act in an unfairly prejudicial manner toward minority shareholders. All shareholders must act in the company's best interests and not for personal gain at other shareholders' expense.
What remedies are available for minority shareholders?
Remedies include filing an oppression lawsuit, alleging breach of fiduciary duty, pursuing a shareholder derivative suit, and requesting a court-ordered buyout of the minority's shares. Damages, injunctions, dissolution, and other remedies may also be available.
How can mediation help resolve shareholder disputes?
Mediation provides a confidential, non-adversarial process where an independent mediator facilitates communication and helps shareholders identify mutually agreeable solutions. Mediation often preserves business relationships.
When is litigation the best option for a shareholder dispute?
Litigation is best when prior efforts at negotiation, mediation or buyout fail and shareholders' rights have been violated through oppression, fiduciary breaches, fraud or other improper actions. Experienced litigation counsel can protect shareholder rights.
Consult Our Shareholder Dispute Attorneys
Shareholder disputes can spiral out of control, disrupting operations and destroying shareholder value. But in the hands of experienced counsel, many disputes can be resolved quickly through mediation or negotiation. Others require targeted litigation to protect shareholders' rights.