Minority Shareholder Oppression

The firm represented the majority shareholder of a corporation against the claims made by a minority shareholder (one who owns less than 50% of the stock of a corporation, or less than controlling interest in a LLC or partnership). The trial court and the court of appeals affirmed the decision of the arbitrator in an arbitration proceeding that there was no minority shareholder oppression as claimed by the minority shareholder.

The 49% shareholder claimed that the majority shareholder was using his majority ownership control of the company to prevent the minority shareholder from exercising his rights as a shareholder and received benefits and financial gains for themself that were not shared with the minority shareholder. The minority shareholder presented evidence that the majority shareholder received vehicles, leased their property to the corporation at above market rates, got special discounts, received off book income and discounts and cut back the minority shareholder’s income by exercising their majority control. Irrespective, based upon current legal standards it was found that there was no abuse by the majority shareholder or right of recovery under the other claims, in fact, the Supreme Court has ruled that there is no claim for majority shareholder oppression.