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Securities & Shareholder Disputes

Did You Know?

It is estimated that there are 1,758,000 partnerships in the U.S. that account for more than 1.14 billion dollars a year in business (Bizstats)

There are many issues that may arise between shareholders, including freeze-outs, option disputes, breach of shareholder agreement issues and other matters.  The breakdown of a business relationship always involves difficult issues of business law mixed with tax problems.

An experienced attorney can help you analyze the complex issues that may exist within your shareholder dispute and determine what the proper course of action would be for your situation. An attorney can resolve shareholder disputes through negotiation, alternative dispute resolution, or litigation. An experienced attorney can also help with shareholder disputes and understanding and provide timely and practical advice to:

  • Directors
  • Companies
  • Professional advisers
  • Majority shareholders
  • Minority shareholders

Shareholder disputes can often arise when existing directors are forced off the board and their shares compulsorily acquired in accordance with the Articles, or when a minority shareholder - whose rights are being suppressed - seeks the protection of the Court. Valuing shares in these circumstances can result in unfounded claims of professional negligence, especially where a business has grown quickly after the date of valuation.

The resolution of such cases can be complicated especially where it is alleged that the ejection was made by the remaining director/shareholders' in the knowledge that there would be short-term growth in the value of the shares - substantiating who knew what, when, can be a daunting and extensive task. The complexities in this type of valuation are the subjective assessment of future company performance and profitability.

Dissenting Shareholder

A dissenting shareholder is someone who objects to a proposed corporate action and demands payment for his or her shares. Under most state laws, a shareholder may dissent from specified proposed actions: a merger or consolidation, a plan of share exchange, a sale or exchange of substantially all of the corporation's assets, certain amendments to the articles of incorporation that would adversely affect the rights of shares held by the dissenter, or any action with respect to which the articles or bylaws of the corporation grant a right to dissent. The shareholder must give notice of dissent before the action is voted upon, and if the action is approved, the corporation must buy the shares of dissenters for fair value.

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