Norris McLaughlin & Marcus, P.A.

Blogs > Shareholder Disputes in New Jersey

Preparing For Business Divorce Litigation

Jul 17, 2017

How To Prepare For Retaliation From Filing Business Divorce Litigation

Many shareholders contemplating getting a “business divorce” have put up with an intolerable situation for years, because they fear that filing a shareholder oppression lawsuit will somehow make matters even worse.  They might be partly correct in the short term.  But the long-term gains often outweigh temporary negatives.

For example, one client had been marginalized and sidelined for years from all important company decisions and all company financial information. » Read More

Jun 29, 2017

It’s Never Too Late to Gain Allies in Business Divorce Litigation

In closely-held businesses in New Jersey with multiple owners, it seems fairly obvious that the more co-owners you can recruit to your side in a business divorce litigation, the better.  You don’t need a lawyer to tell you that.  However, what is not so obvious is the possibility of recruiting co-owners to your side once the litigation has commenced.

Litigation – especially business divorce litigation – can be quite divisive. » Read More

Apr 03, 2017

I Was Doing The Same Thing As The Majority Shareholders – Part II

In my last post, I addressed the fact that, just because a minority shareholder has gone along with certain practices in the past, his acquiescence will not necessarily be fatal to a shareholder oppression claim.   However, that does not mean you should simply go along with something that you fundamentally disagree with, and assume it will have no consequences to you in the future.» Read More

Mar 28, 2017

What If I Was Doing The Same Thing I Now Want to Sue Over?

Many clients ask at the start of a business divorce lawsuit, “Is it fatal to a shareholder oppression claim if I was doing some of the same things that the majority owners are doing that I am now complaining about?”  As often happens when it comes to a nuanced legal analysis under New Jersey law, the answer is, “It depends.”

For example, suppose you are a one-third shareholder, and the other one-third shareholders collectively run and control the business operations, especially the finances. » Read More

Mar 06, 2017

If You Lose A Minority Shareholder Oppression Lawsuit, Things Will Likely Get Worse – So Do It Right

When minority shareholders in New Jersey (including LLC members) are being treated unfairly or oppressively, the New Jersey minority shareholder oppression statute provides significant rights that are written about quite frequently on this site. The upside of a successful oppression suit is often a buyout at market value.  However, what if the minority shareholder loses the case?

The consequences of losing a shareholder oppression suit can be enormous, as most shareholders get only one true “bite at the apple.”   In other words, if you already felt you were being treated unfairly, but the court did not grant you the relief that you wanted and left you as a minority shareholder, how likely would you be to ever file a second shareholder oppression lawsuit? » Read More

Jan 26, 2017

Many Discovery Tools Exist To Find Emails To Prove Shareholder Oppression

I have noted many times on this blog that emails often prove shareholder oppression cases.  It can be fairly easy for majority shareholders who are careful, and seek legal advise beforehand, to mask their true intent when attempting to “freeze out” a minority shareholder.  For example, when the majority shareholders set their salary and bonus at a rate the minority shareholder thinks is outrageously high (ensuring there is no money to distribute to shareholders at the end of the year), they could do so firmly believing that they are paying themselves a fair salary. » Read More

Nov 10, 2016

Being Prepared To File Business Divorce Litigation May Yield a Negotiated Agreement

Business owners who are having a dispute with their business partners (in New Jersey) should not read this blog and assume their only remedy is shareholder dispute litigation.  Because of the cost – both in legal fees, and to your business – litigation should almost always be a last resort.  But being prepared to file litigation often leads to other positive, productive results.» Read More

Sep 13, 2016

New Case Addresses LLC Member Expulsion in New Jersey

The New Jersey Supreme Court has decided a new case addressing what it takes to expel a member from an LLC in New Jersey.

The applicable statute in New Jersey (42:2C-46(e)) has three subsections dealing with expelling a member, two of which are fairly clear.  One section permits the expulsion of a member by the Court when he or she engages in activity that may hurt the company in a material way, or is about to engage in such activity; and another permits expulsion when a member willfully and persistently breaches the Operating Agreement or the member’s fiduciary duties. » Read More

Aug 31, 2016

What To Do If Filing Shareholder Dispute Litigation Might Potentially Harm The Company

To negotiate – or to sue?  That is the question when the decision to sue might potentially hurt the company.

A minority shareholder (or LLC member) in New Jersey is often faced with a difficult choice.  Confronted with mounting evidence of shareholder oppression and improper conduct by the majority, minority shareholders may have the right to sue and attempt to force a buyout of their shares. » Read More

Aug 10, 2016

Choosing an Accountant? Choose Wisely and You Could Avoid Shareholder Dispute Litigation!

When you find yourself involved in a minority shareholder dispute, whether you are the Company (majority), or the minority owners, the role of the company accountant is often somewhat unclear.  The more experience your company accountant has with dealing with differing shareholder factions, the better.

For example, New Jersey law spells out precisely what financial documents a minority shareholder is absolutely entitled to see, and the list is not terribly long. » Read More

Subscribe

Name
Email *