News & Analysis as of

Majority Shareholders

Cooley LLP

(Truthful) Recollections May Vary: How English Courts Judge Truth From Memory

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The judgment in Jaffé & Another v. Greybull Capital LLP & Others gives an excellent insight into how the English courts are grappling with issues arising from the fallibility of memory....more

Fox Rothschild LLP

Court Declines to Undo a Corporate Board’s Vote that a Disgruntled Shareholder Skipped

Fox Rothschild LLP on

In a costly episode of Aaron Sorkin’s adage that “decisions are made by those who show up,” the majority shareholder in a pair of family-controlled oil and gas companies learned of about 850,000 reasons why attendance can be...more

Farrell Fritz, P.C.

Prudent Management or Financial Starvation: Can Minority Members Compel the Majority to Make Distributions?

Farrell Fritz, P.C. on

“It all started when the distributions stopped.”  In my travels as a business divorce litigator, I’ve seen many disputes between LLC co-owners that begin with that message.  A minority owner is content to remain a “silent...more

Bradley Arant Boult Cummings LLP

My Partner Just Sued Me: Strategies Majority Owners Should Consider in Defending Claims Filed by Private Company Investors

Conflicts between co-owners in private companies are common, but the vast majority are worked out through dialogue and negotiation. When these internal conflicts cannot be resolved, however, minority investors may file suit...more

Akin Gump Strauss Hauer & Feld LLP

EU Publishes New Best Practices Guidance, including Updated Ownership Test and Additional Control Guidance

Key Takeaways - On 3 July 2024, the Council of the European Union (the “EU Council”) published its revised Update of the EU Best Practices for the effective implementation of restrictive measures (“Best Practices”).This...more

Cadwalader, Wickersham & Taft LLP

Secondary Fraud Claims Against a Non-Party to M&A Deal Allowed to Procced Under Delaware Law

On June 27, 2024, in Matrix Parent, Inc., et al. v. Audax Management Company, et al., the Delaware Superior Court denied Audax’s motion to dismiss, allowing to proceed H.I.G. Capital’s fraud claims in connection with its...more

Bradley Arant Boult Cummings LLP

Opening Up the Business Partner Time Capsule: Partnership Lessons Shared by Owners and Investors

Hindsight can be a wonderful thing, especially if hard-earned lessons are adopted by others who are willing to learn from past mistakes. When private company owners and investors share with me some of the wisdom they have...more

Saul Ewing LLP

Minnesota Supreme Court Leaves the Law on Corporate Minority Beneficial Interest Buyout Rights Unsettled but Reaffirms Notice...

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Minnesota has a unique statute that allows minority shareholders in a closely held corporation to initiate an action for a buy-out of their interests. Minn. Stat. § 302A.751, subdivision 2. Under the Minnesota Business...more

Skadden, Arps, Slate, Meagher & Flom LLP

Mind Your Disclosures: Delaware Courts Are Asking Just When a Stockholder Vote Is ‘Fully Informed’

A fully informed stockholder vote can help protect a company and its directors from lawsuits challenging a transaction. Under Delaware law, board decisions may enjoy deference under the business judgment rule where...more

Bradley Arant Boult Cummings LLP

Cashing In, But Without Fully Cashing Out: Liquidity Options for Private Company Majority Owners

Business owners of private companies invest huge amounts of time and resources in their business, which may include the bulk of their financial capital. For owners who do not want most of their net worth to remain tied up in...more

Bradley Arant Boult Cummings LLP

Resilience Required: “CRAP” Is Necessary to Blossom as the Successful Majority Owner of a Private Company

Private company owners strive for success but getting there is not an easy or straight path. I have been working closely with business owners now for more than 40 years, and I have been reflecting on the key character traits...more

Morgan Lewis

Delaware Corporation’s Nevada Move Subject to Entire Fairness

Morgan Lewis on

In the case of TripAdvisor Inc., the Delaware Court of Chancery held that the corporation’s decision to reincorporate in Nevada is subject to the entire fairness standard. The court found that, based on the facts pled,...more

Bodman

Shareholder Oppression Claims in Closely Held Michigan Corporations: A Powerful Remedy Against Abuses of Power

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Most institutions in our society make decisions upon the consent of the majority, from legislatures passing important bills to families deciding on what movie to watch on movie night. ...more

BCLP

Tesla’s Super-charged Equity Award to Elon Musk Unplugged by Delaware Court Cautionary Tale for Boards and Executives

BCLP on

The Delaware Chancery Court invalidated a substantial equity award to Elon Musk – the largest in history. It applied the entire fairness test instead of the more deferential business judgment rule, finding that Musk...more

Farrell Fritz, P.C.

The First State Defines the Scope of Majority Shareholder Fiduciary Duties

Farrell Fritz, P.C. on

More often than not, the centerpiece of an intra-owner business dispute is a claim that those in control of the business breached their fiduciary duties to the company or the minority owners.  While often easy to assert, the...more

International Lawyers Network

Establishing a Business Entity in Kenya

[co-author: Mourice Okon] a) Types of business entities in Kenya - Kenya has 5 main types of business entities that is, sole proprietorships, partnerships, limited liability partnerships, companies, non-governmental...more

Bradley Arant Boult Cummings LLP

Selecting Independent, Experienced Company Managers: One of The Most Important Decisions for Majority Owners

Majority owners of private companies have many important decisions to make, but one of their most impactful will be selecting the people to serve as the company’s managers (for LLCs) or as directors on its board (for...more

DarrowEverett LLP

Buyouts of Closely Held Shares: All’s Fair Value in Love and War

DarrowEverett LLP on

In matters of corporate divorce, deadlock, majority oppression, or usurpation of corporate opportunities are all well-tread grounds for disputes between co-owners of closely held entities. These disputes often culminate in...more

Bradley Arant Boult Cummings LLP

New Year’s Resolutions for Private Company Owners: Clean House and Benefit from Proactive Leadership

As the year winds down, majority owners can hit the ground running in the new year if they adopt business resolutions that motivate their executive group and create the potential for the company to reach new heights. The...more

Bradley Arant Boult Cummings LLP

Driving Between the Lines: As a Private Company Majority Owner, What Are the Rules for Dealing with Minority Business Partners

The one who has the gold often makes all the rules, but the majority owner of a private company who has minority partners in the business does not have complete freedom, because majority owners owe duties that apply to their...more

Goodwin

“Corrective construction” to achieve commercial common sense in company articles

Goodwin on

In the recent Court of Appeal judgment in DnaNudge Limited v. Ventura Capital GP Limited [2023] EWCA Civ 1142, the court confirmed that a provision of the company’s articles allowing for the conversion of Series A shares to...more

Bradley Arant Boult Cummings LLP

Breaking Up Is Hard to Do: Issues to Consider in a Business Divorce

It may be a reflection of summer’s lazy days or a simmering frustration that has built up over time, but it is not uncommon for a majority owner or a minority investor in a private company to decide the time has come to...more

Bradley Arant Boult Cummings LLP

The Time to Say Goodbye to Your Business Partner: When Subtraction Results in Addition for the Company

Successful private company owners often share the traits of having vision, passion and a strong sense of purpose. That does not mean that they govern their companies without having any disagreements with their minority...more

Bradley Arant Boult Cummings LLP

Has the Bloom Come Off the Rose? It May Be Time to Pull the Plug on Your Private Equity Investment

Private growth companies have ups and downs – only rocket ships tend to go straight up. Therefore, it can be difficult for an investor holding a minority stake in a private company to know whether a challenging time for the...more

Barnea Jaffa Lande & Co.

Israeli National Labor Court Rules Investors Are Not Employers

The Israeli National Labor Court recently issued a ruling addressing a claim to “lift the corporate veil” in a dispute between two groups of shareholders in a company. The National Labor Court’s ruling did not allow the...more

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