Shareholder disputes are conflicts that arise between shareholders (owners) of a company over the management or operation of the company. These types of disputes can occur in both privately held and publicly traded companies.
There are several types of shareholder disputes that can occur, including:
- Mismanagement: This occurs when shareholders believe that the company’s management is not acting in the best interests of the company or its shareholders.
- Oppression: This occurs when the majority shareholders of a company act in a way that is unfairly prejudicial to the minority shareholders.
- Derivative actions: This occurs when shareholders bring a lawsuit on behalf of the company against its management or other parties.
- Breach of fiduciary duty: This occurs when shareholders believe that the company’s management or directors have violated their duties to the company and its shareholders.
In a shareholder dispute, the plaintiff (the shareholder bringing the lawsuit) must prove that the defendant (the company or its management) has engaged in the alleged misconduct and that they have suffered damages as a result. If the plaintiff is successful, they may be entitled to damages to compensate them for their losses.
Shareholder disputes can be complex and time-consuming, and can have serious consequences for businesses, as they can result in financial losses and damage to a company’s reputation. It is important for businesses to be aware of their legal obligations and to take steps to ensure that they are in compliance with applicable laws and regulations.
Commercial litigation support can be valuable for businesses that are involved in shareholder disputes, as it can help to ensure that their legal rights are protected and that they receive the compensation they are entitled to. It is important to work with an experienced attorney or legal team in order to navigate these complex issues and achieve the best possible outcome.