Oppressed Shareholder Attorneys
You would think that all the shareholders of a company would want the same thing: for the company to succeed so they can all make money. But in reality it doesn’t always work out that well. Too often we see shareholders divided into two groups: the majority shareholders and the minority shareholders.
There are several ways the shareholders of one company can be divided into two groups. Sometimes it’s a matter of one group having a different vision or goals for the company. Other times one group of shareholders might find that their interests no longer align with another group of shareholders. For example, one group might be focused on short-term goals for the company’s revenue, while another group is more concerned about the company’s long-term performance.
When one group of shareholders outnumbers another, they can sometimes use their greater number and increased control of the company to oppress the minority shareholder group.
Majority shareholder groups can oppress minority shareholders in a variety of ways, but some of the most common forms of shareholder oppression include:
- Excluding shareholders from management decisions
- Firing minority shareholders without paying them their dividends
- Wasting corporate assets
- Engaging in fraud
- Misappropriating the company’s assets or its customers
- Compensating the majority shareholders at a disproportionately higher rate than the minority shareholders
- Engaging in business transactions that benefit one or a few shareholders, but are not in the best interests of all shareholders
- Diluting the amount of interest the minority shareholders hold in the company
- Refusing to pay dividends to minority shareholders
- Selectively purchasing shares from members of the majority shareholders
- Failing to provide minority shareholders with information about the business, its operations, and/or its financial situation.
It’s always frustrating to be in the minority when you’re trying to operate as a group, but there’s a difference between being frustrated and being oppressed. Majority shareholders cross the line into shareholder oppression when they engage in behavior and make business decisions that actively work against the interests of the minority shareholders or fail to meet their reasonable expectations as shareholders.What Can You Do to Stop Shareholder Oppression?
If you’re a member of a minority group of shareholders and you think the actions of the majority have crossed the line into shareholder oppression, you should speak with a qualified business attorney right away. The answer is not always to go to court, but if the majority shareholders continue to make decisions that are against your best interests as a shareholder, then it might be time to consider filing a shareholder oppression lawsuit.
A judge who rules in favor of the minority shareholders has several options available to them to help make things right. Some of these options include:
- An emergency injunction to force the sale of stock from majority shareholders to minority shareholders
- Appointing a board member to break a deadlock
- Appointing someone to manage the company in a way that protects the interests of all the shareholders
- Ordering the business to be dissolved
At Lubin Austermuehle, we focus on relationships and are driven by results. When it comes to unraveling complex business disputes, we are proud of our track record of outright victories in court or substantial and lucrative settlements for our valued clients. In every case, our goal is to resolve disputes as quickly and successfully as possible, helping shareholders protect their investments and get back to business as usual. We serve clients throughout Illinois and the Chicagoland area. You can contact us online here or call us on our toll-free number at 833-306-4933 or locally at 630-333-0333.