NJ Shareholder Disputes: The "Oppressed Shareholder Statute" and Other Legal Factors that You Must Consider
Minority Shareholder Rights: New Jersey's Oppressed Shareholder Laws
For shareholders of small closely-held New Jersey corporations, New Jersey law, and the New Jersey "Oppressed Shareholder Statute" (N.J.S.A. 14A: 12-7) in particular, afford a number of legal remedies that you must be aware of when faced with a shareholder dispute. Shareholder disputes are serious and, in most instances, will impact your business and the financial well being of your family. So, when faced with the first sign of a "problem" it is critical that you evaluate your options with an experienced attorney. One such option you must consider is the NJ Oppressed Shareholder Statute and the "substantial" rights and leverage that it affords. Under this statute on "aggrieved or oppressed," shareholders may seek injunctive relief, the appointment of a fiscal agent and in certain instances the buyout of your partners shares. Some factors to consider include:
- New Jersey's "Oppressed Shareholder Statute" ("OSS") is a critical tool that must be "timely" evaluated when faced with a dispute with your fellow shareholders.
- Under OSS, even fifty percent (50%) shareholders may qualify as a "minority status shareholder" entitled to protection;
- When faced with wrongful acts of a shareholder - even a fifty percent shareholder - OSS may provide you with the legal right to sell your shares or buyout the interests of the other shareholder;
- Under OSS, the court may order the sale of your company to a third party shareholder disputes, impacting every aspect of your life. While it is almost always preferable to avoid litigation, it is nevertheless necessary that you immediately evaluate your legal rights and establish a plan. When speaking to your attorney, plan ahead. You must evaluate and discuss the "substantial" benefits and rights afforded by the New Jersey Oppressed Shareholder Statute and how it may be implemented to protect your business interests.
To learn more about your rights as either a minority shareholder, controlling shareholder or an equal shareholder, contact New Jersey and New York partner and shareholder lawyer, Charles N. Internicola, Esq. at (800) 979-4904.