Directors of a corporation owe fiduciary duties to the shareholders of the company. This means that when directors communicate with shareholders about the company, they have a fiduciary duty to exercise due care, good faith and loyalty. Directors can be held personally liable if they intentionally or recklessly mislead shareholders…
Minority shareholders in closely held businesses generally lack the ability to control the actions of a company which makes them vulnerable to oppression from the controlling shareholder or shareholders. Minority shareholder oppression claims frequently include allegations that the controlling shareholders have funneled company money or resources to themselves and attempted…
After several former employees stole and destroyed internal data from their employer in order to found a competing business, and were sued, the trial court’s appointing of a third party to monitor the new company’s compliance with discovery and restraining orders was not error. Shamrock Corporation has sold antifreeze, motor…
As we have written about previously, one of the concerns with purchasing a minority stake in a closely held corporation is the potential for shareholder oppression. This concern is even more relevant when a non-family-member considers buying into a family-owned business. One minority shareholder found this out the hard way…
No withstanding allegations of majority shareholder oppression, the Seventh Circuit rejected those arguments paying deference to the business judgment rule because of the Indiana Legislature’s directive to give officers and directors a wide berth for their business decisions. The Court observed: “Indiana has statutorily implemented a strongly pro-management version of…
Super Lawyers named Chicago and Oak Brook shareholder oppression attorney Peter Lubin a Super Lawyer in the Categories of Class Action, Business Litigation, and Consumer Rights Litigation. Patrick Austermuehle of the Firm was named a Rising Star again and has a great deal of experience as a Chicago Defamation…
If the CEO of a bankrupt company buys shares in a spinoff company, is that evidence of sabotage, or just that they’re trying to make the best of a bad situation? Edward Lampert, who was chairman and CEO of Sears Holding Corp. when it went bankrupt, is now being sued…
We obtained justice in a shareholder dispute and shareholder oppression case after Defendants hired a former partner of the judge. The Sun-Times reported the story as follows: Lawyer’s motives questioned after judge’s recusal Did lawyers for one side of a case hire the judge’s former law partner just so the…
When two sisters, minority shareholders and directors of a moving company, were denied access to corporate books, the trial court erred in finding that, as corporate directors, they had absolute access to corporate records. Rather, they had presumptive access and the corporation was required to demonstrate that request for documents…
Walking the tightrope of business ethics and practice becomes more and more under scrutiny in a climate where minorities are divided. Business owners want to maximize potential, please customers and, let’s face it, the money does matter! Have a business and then be implicated with being racist will come into…