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Minority Shareholder and Partnership Dispute Warning Signs

Charles Internicola

by Charles Internicola
National Business and Franchise Lawyer

Date: 01/28/2013 | Category: Partnership Disputes | No comments

ARE YOU EXPERIENCING ANY OF THESE WARNING SIGNS?

Over time‚ when it comes to New York and New Jersey shareholder and partnership disputes‚ certain patterns develop.  If you are currently involved in a dispute or pre-dispute patterns‚ it is important for you to be aware of these warning signs or common characteristics.

7 SUBTLE [WARNING SIGNS] AND COMMON CHARACTERISTICS FOR MINORITY SHAREHOLDERS ABOUT TO FACE A LOCK-OUT AND SHAREHOLDER DISPUTE:

  1. You are either (a) a minority shareholder with less than a 50% equity interest‚ or (b) you are a 50% partner or shareholder but you do not control day-to-day operations or the books and records.
  2. You have decided that it is time to move on or your partner has asked you to move on and although you are discussing some "numbers" you dont really know what your equity interest is worth.
  3. The more you ask for books and access to information‚ the more aggressive your partner seems to become.
  4. Things may be escalating and‚ slowly but surely‚ your access to the business and its records are becomming more diminished.
  5. Although you each have attorneys and are "talking"‚ the talking seems to go on and on but with really no outcome (i.e.‚ a stalling tactic – maybe?).
  6. Although you are a shareholder or partner and although you receive a K-1‚ you dont know what your actual distributions (as an equity owner) are or should be.  Quite possibly‚ you may be receiving distributions equal to your "annual tax obligation" but no more.
  7. Your partner has set up some other related companies that you do not fully understand.

Not every warning sign is required and‚ in some instances‚ you only need one. Also you have many "not so subtle"‚ warning signs to look out for.  Like your actual lock-out.

WHY ARE THESE WARNING SIGNS IMPORTANT? Because you need to know that when it comes to partnership and shareholder disputes there are consistent patterns that repeat themselves.  You need to know that you are not the only person facing this economic event and you need to be aware of these subtle warning signs as a wake up call to start taking proactive steps to protect your business interests and legal rights.  Far too many clients come to me after weeks‚ months and‚ in some cases‚ years of wasteful "negotiations" that waste money‚ get no results and‚ in the end‚ weaken your legal position.

WANT TO LEARN MORE ABOUT HOW TO DEAL WITH YOUR DISPUTE AND TO REBALANCE THE PLAYING FIELD?

Order a complimentary copy of "The New York and New Jersey Partnership Dispute Guide"

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