The purpose of this blog entry is to provide a brief list of the squeeze-out techniques often used by majority shareholders in their effort to oppress minority shareholders. The list which follows is merely illustrates of some of the techniques I often encounter with regard to my representation of oppressed minority shareholders. Of course, this list is not exclusive.
A minority shareholder can suffer catastrophic damages in a squeeze-out or oppressive situation. In such a dilemma, the minority shareholder may be deprived of any effective voice in the making of business decisions. Moreover, they could be locked out of the company’s premises, lose their job and be denied access to important information. Without the aid of competent counsel the oppressed minority shareholder could find that their investment in the enterprise is at least temporarily worthless.
The Honorable Gerald C. Escala of the Superior Court of New Jersey, Chancery Division, Bergan County issued an interesting decision which provides additional guidance on the legal issue of minority oppression along with the calculation of “fair value” of the minority owners stock. In Venturini v. Steve’s Steak House, 2006 WL 445059, two nephews who collectively owned fifty percent of Steve’s Steak House filed a complaint against their aunt, Marie Damiani (“aunt” or “Marie”) alleging that they were oppressed minority shareholders.
In most cases, the single most important issue in a minority shareholder oppression dispute is the valuation of the complaining shareholder’s interest in subject closely held company. One important sub-issue is the applicability of marketability and minority discounts in valuing a less than controlling interest in the subject closely held corporation.
This week’s New Jersey Legal Update podcast is a follow-up to a previous podcast on minority oppression discussing who can file a minority oppression lawsuit, and what one can expect if they do. This podcast will follow up with a discussion of one of the most important parts in a minority oppression lawsuit – valuation
This week’s New Jersey Legal Update podcast will discuss oppressed minority shareholder litigation. This podcast will explain who qualifies as an oppressed minority shareholder, the New Jersey statutes that govern shareholder divorces, and what these rules and regulations can mean for you and your business.
Valuation is one of the most important issues in a minority oppression suit. New Jersey law presumes that the valuation date to be used in a minority oppression claim is the date when the complaint was filed.
This week’s New Jersey Legal Update podcast will discuss shareholder oppression within a business partnership. Topics discussed include how oppression within an organization is determined and ways in which the court assesses the company’s value for purposes of dissolution.
