Because termination of one’s employment does not necessarily equate to shareholder oppression under New Jersey law, as seen in my last post, it is often a good idea to take proactive measures to inoculate yourself against a termination that leaves you in the company as a shareholder, but not as an employee. This is especially critical if you have invested your own money, since an adverse result in a shareholder oppression litigation would leave your shares held hostage by the majority shareholders, essentially allowing the majority to use your capital in a manner over which you have little or no control.» Read More
A common theme among minority shareholders seeking legal representation is termination of employment. Readers of this blog may be aware that termination can often constitute minority shareholder oppression, warranting a remedy such as a court-ordered buyout. But, unfortunately, not all terminations are equal, as not all terminations constitute oppression.
The key to whether termination of employment amounts to minority shareholder oppression is what the court calls the “reasonable expectations” of the employee/shareholder. » Read More
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
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
Recently, a defendant testified in a deposition that I was conducting that there was no reason that he could not fire my client, who was a 28% minority shareholder in a New Jersey corporation. Since the defendant was the majority (51%) owner, he believed he could fire whomever he wanted.
Of course, he is right. He could fire whomever he wants. » Read More