Partnership Disputes: Protection for Oppressed Minority Shareholders | Franchise Law Blog

Partnership Disputes: Protection for Oppressed Minority Shareholders

Minority Shareholder Rights: Protection from Oppression
Many times when I am contacted and consulted by a minority shareholder‚ partner or member (someone who controls less than 50% equity interest) for advice and a plan for dealing with a lock-out or a majority intent on squeezing the value of out of the minority‚ is a genuine concern about either a onerous shareholder agreement (one where the majority controls) or the simple fact that he or she‚ as a minority shareholder‚ may be "out voted".  Basically‚ minority shareholders are concerned that their non-controlling interest or onerous shareholder agreement will‚ effectively‚ render their equity interest worthless.

While the concern that I have described exists for good reason‚ minority shareholders need to know‚ beware of and discuss with his or her shareholder attorney‚ the "fiduciary rights and obligations that are due to minority shareholders and how these rights may be used to fight off oppressive acts. Here are some factors to consider:

This is a significant issue one that is critically important to minority / non-controlling shareholders and partners.  If you are faced with a situation where the majority / controlling partners are acting for the purpose of forcing a buy-out or nullifying your interests‚ understand that you may posses many more rights than those stated in your agreement.  Understand that your partners owe you a fiduciary duty and if you are faced with litigation you very may well possess significant claims for legal relief.

For information about the rights of minority shareholders and partners and how Shareholder Lawyer Charles N. Internicola‚ Esq. assists minority shareholders‚ call Mr. Internicola and his staff at 800.976.4904 

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Date: 01/10/2012 | Category: Partnership Disputes

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