Articles Posted in Shareholder Disputes

There are a variety of risks that can come with being a minority shareholder. Despite not having the same power or control over a corporation as majority shareholders, minority shareholders still have several rights and remedies under Illinois law. If you own a non-controlling interest in a corporation or an LLC, it’s essential to understand…

When a multi-member LLC is formed, members usually have the best intentions. But disputes can sometimes arise when members don’t agree on how the business should be operated — or members with a controlling interest engage in conduct that is oppressive to the minority members. Conflicts can also occur when a controlling LLC member excludes…

Directors and officers of a corporation, as well as managers and members of an LLC, must always act in the best interests of the company. A derivative lawsuit is a mechanism that can be used to protect shareholders from abuse by a corporation’s officers and directors by ensuring accountability when those in control fail to…

Business partnerships can come with many benefits and help owners accomplish much more than they would as a sole proprietor. But partners will rarely agree on everything all the time, and business disputes are not uncommon. Unfortunately, when difficult scenarios arise, the company’s future and its bottom line can be placed at risk. It’s important…

“Because Wallace and Joan have not authorized dividend distributions, Martin has received no financial benefit from his minority interest in E&E. Meanwhile, Wallace has approved his own annual compensation in the millions of dollars.” Smith v. Smith, 2020 U.S. Dist. LEXIS 81240, *3 (E.D. Mich. May 8, 2020). The Smith case, pending in the U.S.…

Disorganization, financial difficulties, and greed can lead to a partner taking more from a business than they’re entitled. This, of course, comes at the expense of their partners. In closely held businesses, there are unfortunately numerous ways to cheat. A few examples are a partner funneling money to another entity he or she owns under…

From fake loans to $80,000 bonuses to certain shareholders in lieu of dividends to all, the defendants in Chomiak v. Kasian provided a variety of avenues for a successful shareholder oppression action. On August 3, 2017, the Appellate Division of the New York Supreme Court issued an opinion affirming the lower court’s ruling for the…

In a recent order, the Illinois Appellate Court held that Section 12.56(g) of the Business Corporation Act of 1983 (the “Act”) must be read to provide compensation for provisional directors by the corporation as opposed to it shareholders. Sinkus v. BTE, 2016 IL App (1st) 152135-U. In Sinkus, the plaintiff, Sinkus, and one of the…

The Appellate Court of Illinois recently affirmed an award of attorney fees in a Section 12.56 proceedings. In Thazhathuputhenpurac v. JT Enterprises of Chicago, the Court held that minority shareholder was entitled to reasonable attorney fees due to the 51% shareholder’s failure to act in good faith in “filing a frivolous counterclaim and forcing [the…

A non-public corporation is a corporation that has no shares listed on a national securities exchange or regularly traded in a market maintained by one or members of a national or affiliated securities association. In a shareholder action in a non-public corporation, circuit courts may order one of several remedies listed in Section 12.56 of…