When minority shareholders in New Jersey (including LLC members) are being treated unfairly or oppressively, the New Jersey minority shareholder oppression statute provides significant rights that are written about quite frequently on this site. The upside of a successful oppression suit is often a buyout at market value.\u00a0 However, what if the minority shareholder loses the case?<\/p>\n
The consequences of losing a shareholder oppression suit can be enormous, as most shareholders get only one true \u201cbite at the apple.\u201d\u00a0\u00a0 In other words, if you already felt you were being treated unfairly, but the court did not grant you the relief that you wanted and left you as a minority shareholder, how likely would you be to ever <\/em>file a second shareholder oppression lawsuit?\u00a0 After a six-figure legal bill that resulted in a loss, how eager would you be to do it all over again?\u00a0 Even if the facts had become even more egregious, and you now had a suit with a higher likelihood of success, most litigants would be too gun-shy to go through it all over again.<\/p>\n And the majority shareholders would know full well that few people would have the finances, the fortitude, and the wherewithal to file a second suit.\u00a0 Because of this, many majority shareholders in such a case would only \u201cdouble down\u201d on their actions.<\/p>\n For the foreseeable future, the majority shareholders would be able to use your capital as they saw fit, with you having little or no say over matters.\u00a0 You would not be able to use your capital to start another business.\u00a0 Being in a position of power, the majority would have the ability to manipulate their salaries and bonuses, keeping any benefits you receive from your ownership interest \u2013 like dividends \u2013 to a bare minimum.\u00a0\u00a0 Whatever actions led to the first lawsuit would likely get significantly worse once the case was over.<\/p>\n In other words, a minority shareholder oppression action is unlike most other commercial litigation, because usually the parties to litigation have already gone their separate ways, and are simply cleaning up the mess.\u00a0 In a breach of contract litigation, the parties suing each other usually would have no reason to do business with each other ever again.\u00a0 So, if the plaintiff loses, it does not get the money it sought in the case; but it does not have to remain in business with the defendant for years, or even decades, after the suit is over.<\/p>\n Since the consequences of losing an oppression suit are so critically high, it must be done right.\u00a0 There are many fine litigation firms out there, but make sure the attorney you hire not only has the experience to win your oppression lawsuit, but also has the experience to tell you if you are better off not filing a suit just yet, and possibly taking other action until your case is stronger.<\/p>\n","protected":false},"excerpt":{"rendered":" When minority shareholders in New Jersey (including LLC members) are being treated unfairly or oppressively, the New Jersey minority shareholder oppression statute provides significant rights that are written about quite frequently on this site. The upside of a successful oppression suit is often a buyout at market value.\u00a0 However, what if the minority shareholder loses […]<\/p>\n","protected":false},"author":17,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[8,2,94],"tags":[49,95,96,89],"coauthors":[],"acf":[],"yoast_head":"\n