Shareholder Disputes in New Jersey

Shareholder dispute litigation may often be an effective way to achieve a remedy for wrongdoing committed by the majority, such as getting paid for your shares. However, filing litigation against your business partners may not be the most cost-effective way of obtaining such relief. » Read More

Attorneys often use the phrase “business divorce” to describe when business partners can no longer get along and want to be legally separated from each other, or at least one of them does.

But what happens when, like divorcing parents arguing over child custody, no one can agree who should wind up with the company?  » Read More

A newly-decided case in New Jersey dictates that the court follow an operating agreement (LLC) or shareholder agreement (corporation) that has a specific provision on valuing shares when an owner is retiring or otherwise voluntarily leaving. » Read More

A common approach for oppressed minority shareholders seeking to prepare themselves for business divorce litigation is to start taking affirmative action to build a case.

In fact, I tell clients to do this all the time, but only with careful guidance. » Read More

In a previous blog post, “Don’t Let Ego – Yours or Your Attorney’s – Get in the Way of a Settlement,” I made a passing reference to the strategy of taking discovery (including depositions) from company customers and vendors in business divorce litigation. » Read More

The truth about business divorce litigation in New Jersey is that most of them result in some sort of buyout.  An entire (expensive) litigation often takes place over related and critical issues, such as who will be the buyer and who will sell; valuation issues, including (sometimes) the valuation date; and the equalization of money (such as when one side has paid itself too much).  » Read More

Even after nearly three decades of handling shareholder disputes, every so often I get a case that presents new challenges and never-before-seen issues. Last week, we were able to declare victory in one such case when my partner, Andrew Linden, and I successfully moved to dismiss a corporate governance case involving an Indian Temple on First Amendment grounds. » Read More

Shareholder oppression – at least in New Jersey – does not necessarily mean you must prove that your business partner is acting maliciously.  In fact, he could be a wonderful human being who honestly believes that he is doing the right thing for the business at all times and would never intentionally hurt you or the business.  » Read More

When majority owners of a closely-held business engage in conduct that constitutes shareholder oppression, it comes in all shapes and sizes. One wrongful act that seems to be occurring more frequently is the creation of a competing company that excludes one or more minority shareholders. » Read More

There appears to be an uptick in the filing of meritless corporate shareholder and LLC member oppression claims in New Jersey.  Not everything that majority shareholders do that upsets a minority owner is worth spending legal fees to pursue.

When the only allegations one can make are a failure to keep an absentee shareholder fully informed of all business transactions, and a failure to obtain that minority shareholder’s consent to such transactions, that alone is rarely a recipe for successful litigation.  » Read More