State corporation laws give shareholders certain rights, including the right to elect directors, to receive financial information, and to be protected against the artificial dilution of their investments through mergers and other transactions. Shareholder oppression occurs where some shareholders – typically the majority owners – attempt to disadvantage or squeeze out a minority shareholder.
In addition to suing the company or the controlling shareholders individually, some claims can be brought in what is know as a derivative suit, where one shareholder is allowed to seek relief for the benefit of the company as a whole. Special rules apply to these types of representative lawsuits, and they can be complicated. If you find yourself involved in any kind of corporate or shareholder dispute, you need to seek the aid and guidance of experienced counsel.
Sommers Schwartz attorneys have that experience, as well as a proven track record of results, including:
- Grimes v. Fairfield Resorts, Inc., Case No. 05-cv-1061 (M.D. Fla.), successful challenge to a timeshare company’s “resort ownership point system”
- Camden v. Kaufman, Case No. 96-531080-CZ (Oakland Co., Mich.), blocking the merger of a closely held corporation that would have cashed out the minority shareholders’ interests at an unfair price
- Cicarell v. Provident Mutual Life Ins. Co., Case No. 96-0037 (Philadelphia Co., PA), blocking an attempt by directors to demutualize the company and deprive shareholders of the millions of dollars of corporate profits
Because shareholder disputes can be so divisive, we are also adept at Alternative Dispute Resolution (ADR) proceedings such as mediation, arbitration, and facilitation. When possible, ADR is recommended over costly and time-consuming litigation that can result in court decisions that the parties may find inadequate and where the remedies are often limited and inequitable. Also, ADR frequently proves to be less damaging to the business, as well as to personal and familial relationships that are so important to preserve in many shareholder disputes.
Sommers Schwartz attorneys know that unresolved disputes between shareholders can be disruptive to normal business operations and can drain a company’s resources. The smooth continuation of your business is a high priority, and we have been instrumental in resolving numerous difficult issues while allowing businesses to carry on with minimal disruption. Our attorneys have been involved with a wide range of corporate and shareholder matters, and we’re here to help you however we can.