Chicago Business Litigation Lawyer Blog
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 to hide the misconduct by excluding minority shareholders from accessing books and records. Minority shareholders in Illinois are not without recourse, however, as they have a statutory right to examine the corporation’s books and records. As the First District appellate court recently reminded us, the right to examine corporate books and records demands compliance with certain technical requirements.
The case, Elleby v. Forest Alarm Service, Inc., was filed by a minority shareholder, Ruth Elleby, who owned a 33.5% interest in Forest Alarm Service, Inc. which the complaint described as a family-owned, closed corporation. In addition to Elleby, Forest had three other shareholders: Linda Lichtenauer, Mark Coyle, and Ron Lyngen who owned 33.5%, 16.5%, and 16.5% of Forest, respectively. Coyle was the President and Secretary of Forest in addition to being a shareholder. Continue reading ›