I have previously written on this site about who gets “custody” of the company’s customers in a business divorce. Related to this topic, can employee loyalty become an issue in shareholder divorce litigation?
Many times, it is clear who will remain with the company in the event of shareholder dispute litigation. For example, if a 10% shareholder who has never worked for the company sues for oppression, the suit is not likely to confuse the employees, as it will be viewed as an internal, ownership matter. » Read More
In a divorce, an obvious issue to be resolved is who gets custody of the children. In a business divorce, an issue that often arises is who gets custody of the company’s lawyer.
Many New Jersey corporations and LLC’s have a long-standing lawyer, who has often represented one or more of the shareholders in their individual capacity, as well. What happens when one of the owners discovers that his business partner has been defrauding him, or stealing from the company, or committing some other form of shareholder oppression?» Read More
If you no longer trust your business partner, can your business be saved? This may not seem like an issue for an attorney, and may seem more suited for a psychologist. But an attorney well versed in handling shareholder disputes may be able to help save such a business. At the very least, it may be worth a try, because the alternative may be costly and disruptive shareholder litigation.» Read More
Shareholder litigation: Those two words designate an action that can be profoundly disruptive to a business, because the mere existence of such a pitched battle between owners can bring a closely held company to a grinding halt.
When shareholder litigation is pending, the owners obviously have issues with each other severe enough to warrant filing suit. Those cases can involve allegations as nasty as fraud, mismanagement, or even embezzlement. » Read More
Lately I have been giving seminars to accountants on how members of that profession should handle business disputes between owners in closely held businesses. In fact, just last week I gave a presentation on this issue to the accountants at JH Cohn, one of the region’s largest accounting firms. (I was disappointed that I did not get to meet their spokesperson, Joe Torre, but at least they provided lunch.) Preparing for these seminars got me to thinking how the company accountant can be a minority owner’s ally in a business dispute between business partners.» Read More
I have written previously about majority shareholder abuses that may constitute oppression, entitling a minority shareholder to be paid fair value for his or her shares. Now I would like to focus on how such abuses by a majority shareholder may wind up harming the (oppressed) minority shareholder in more ways than simply cheating him out of money.
Majority shareholders using the company as a “personal piggy bank” is often how a minority shareholder proves that he is being treated unfairly. » Read More