Pleasanton Attorneys Capably Resolve Shareholder Disputes in California
Experienced litigators tackle breaches of duty and business oppression cases
Shareholders zealously guard their investment and want assurances that their company’s officers are worthy of their trust. Although most corporate officers take their fiduciary duties seriously, some take shortcuts that compromise transparency, raising suspicions and inviting disputes. Garcia & Gurney, A Law Corporation represents companies and shareholders in disputes over corporate policies and practices. When conflicts stem from misunderstandings, we can help resolve the immediate issue and recommend new procedures to avoid conflict in the future. When incompetence or criminality is at the heart of an issue, we litigate aggressively to assert our client’s rights and achieve the best results possible.
What is business oppression?
Business oppression results when majority shareholders act to suppress the rights of minority shareholders, denying them a voice in the company and even harming their financial interests. Oppression can be seen in various actions the majority takes, such as denying the minority a seat on the board, manipulating terms to deny payment of dividends, issuing additional stock to reduce the minority’s standing, attempting to squeeze out or freeze out minority shareholders, or terminating a minority shareholder’s employment with the company. The majority usually has discretion in these areas under the company bylaws, but minority shareholders are not helpless, and should seek counsel on how best to assert their rights.
Shareholder disputes resulting from breaches of fiduciary duty
Corporate officers have a duty to manage a company’s assets in a way that enhances their value to the shareholders. An officer’s failure to perform as a responsible fiduciary can lead to a variety of disputes involving:
- Corporate governance — When corporate officers or the board of directors deviate from standard operating procedures, and an adverse effect results, shareholders can challenge these actions in court for equitable relief.
- Breach of contract — When a senior executive violates the terms of an employment contract, and the board does not enforce discipline, shareholders may assert their right to oversight.
- Compensation — An executive’s pay and benefits must be based on value to the company. Should a board of directors approve an exorbitant package without sufficient justification, shareholders may view this as a breach of the board’s fiduciary duty.
- Buy/sell agreements — When companies acquire assets or liquidate holdings, these actions must reflect reasonable judgment and a commitment to enhance share value. When a sale or acquisition appears reckless, shareholders may allege a breach of fiduciary duty.
- Fraud — When discrepancies in company’s financial reporting suggest a scheme to enhance share value through deception, shareholders may demand restitution. Criminal charges are also possible.
- Misappropriation — Officers are not to use or divert company assets for their own enrichment. Again, shareholders may seek restitution, a criminal indictment or both.
Contact a California legal team experienced in shareholder dispute litigation
Garcia & Gurney, A Law Corporation represents companies, corporate officers and investors in shareholder dispute litigation in the Alameda and Contra Costa areas. Our experienced litigators work toward cost-effective resolutions that protect your rights. To schedule a consultation at our Pleasanton office, call us today at 925-468-0400 or contact us online.