Norris McLaughlin & Marcus, P.A.

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minority shareholder

Sep 06, 2017

Overcome Your Nagging Doubts About Business Divorce Litigation

You likely came across this article if you Googled the term “shareholder dispute.”  However, it is just as likely that you Googled the term “business divorce.”  One business owner suing the other(s) to be bought out, or some other escape, is often rightly referred to as business divorce because it is analogous to a divorce among spouses in obvious ways.  This posting is about the less obvious ways the two types of legal actions are similar.» Read More

May 23, 2017

Minority Shareholder Oppression Damages in New Jersey: More Than Just a Buyout?

As I have said many times in this blog, when minority shareholder oppression occurs, the most likely remedy is a buyout.  In other words, courts in New Jersey have the power to compel the majority shareholder to pay “fair value” to an oppressed minority shareholder so the victim of wrongdoing is not forced to remain captive as a shareholder in a company that is treating him improperly. » Read More

Apr 28, 2017

Trust But Verify Regarding Financial Information

Minority owners of closely-held corporations (in New Jersey) often put themselves in a position where they are cut off from access to the company’s books and records.  When that happens, several things can occur, and few of them are good.

For example, majority shareholders who have unfettered access to the company’s finances often abuse their power by granting themselves impermissible benefits that are not related to their employment by the company, and are not proportionately shared with the minority shareholders. » Read More

Dec 13, 2016

Some Pitfalls of Negotiating Your Own Buyout in a Business Divorce

More and more shareholder dispute litigations are settling earlier than ever before, which is obviously a good thing for anyone who does not want to pay a fortune in legal fees (i.e., everyone).  The reason is simple – in all but a handful of business divorce cases, it is obvious to everyone involved that the oppressed minority shareholder will wind up on the receiving end of a buyout. » 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

Apr 20, 2016

Perils Of Negotiating Your Own Buyout

Some clients come in for a consultation with no desire to file an oppressed minority shareholder action.  Instead, the goal is to have an attorney draft the papers necessary to accept an offer made by the other side to purchase his or her shares, avoiding just such a court battle.  Corporate attorneys who do not handle shareholder oppression cases may assume the purchase price is fair, or at least not question it closely, and simply “paper” the transaction. » Read More

Feb 18, 2016

New Jersey Courts Recognize Equitable Ownership In Cases Where Full Ownership May Be Difficult To Prove

I’ve previously written about the fact that, in many cases, a minority shareholder who knows with absolute certainty that he or she is an owner still may have such status challenged.  I have heard some crazy – and some not so crazy – arguments as to why someone is not actually an owner.  In small, closely held businesses, it is not uncommon for the company to keep abysmal records. » Read More

Oct 30, 2015

Negotiating Your Own Buyout May Be Shortsighted [and Is Often More Costly than Paying an Attorney]

Many new clients come to me after they have already negotiated their separation from the company – usually shareholders who have agreed to be bought out – and now want me to just “write it up.”  Kudos to these clients for at least not attempting to draft the entire agreement themselves.  The downside is that these clients often have no idea the harm they may have done to themselves already by negotiating without assistance.» Read More

Jan 17, 2014

Get out of That New Jersey LLC before the Law Changes?

In my last post, I wrote about the fact that your right to simply withdraw from a New Jersey LLC and be paid fair market value for your shares – provided the Operating Agreement does not prohibit this – is being eliminated on March 1, 2014.  Many readers of that post have contacted me, hoping there was a way to extend that deadline. » Read More

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