Do you need proven, experienced help to efficiently resolve a shareholder dispute in San Diego or anywhere in California?  Shareholder disputes are more common than most people realize.  What are the most timely and cost-effective strategies for successfully resolving shareholder disputes in San Diego corporations?  What happens when an investor or minority shareholder has genuine concerns about the actions the management team, the Board of directors or the direction of the corporation?

3 Important Concepts When Approaching a Shareholder Dispute in San Diego or Anywhere in California

• The first step should involve an effective, leveraged negotiation.  Look for a law firm that has a strong track record of resolving shareholder disputes through negotiation.
• California law has specific protections for minority shareholders that are not provided by other states.  This is why it is important to work with an experienced California shareholder dispute resolution attorney.
• There are multiple shareholder rights to exercise, options to gain the attention of majority interests, and causes of action to protect the rights and interests of any shareholder or investor in California.

Resolving Your Shareholder Dispute in San Diego Efficiently

The Watkins Firm has developed proven strategies, and worked to efficiently resolve a shareholder dispute in San Diego and throughout California for more than 40 years.  We bring extensive experience and legal skill to support your goals and objectives.  We deploy proven strategies that are specifically designed to successfully resolve the matter in a timely and cost-effective manner.  We work to quickly and efficiently document a thorough chronology of events and a mastery of available damages.  These are the keys to a prompt, efficient resolution.  Many of our clients are pleasantly surprised to learn that Watkins Firm attorneys are able to resolve the vast majority of shareholder and LLC member dispute cases through effective, leveraged negotiation.  This is the fastest and least expensive route to resolving any shareholder dispute.

Minority Shareholders Interests

California laws are written to level the playing field for minority interests, however “freeze outs” and bullying actions by majority shareholders and corporate managers still take place.  Minority shareholders with a 5% stake have many rights under California law including the right to inspect the books and other important corporate documents and information.

Minority shareholders may be adversely affected by corporate decisions that will negatively impact their own interests.  You may be required to exercise your “appraisal rights” in the event of certain actions such as a merger, exchange of shares, sale of assets or a buyout.  Recent decisions by the California Court of Appeals have supported the ability to set aside or rescind invalid corporate actions or transactions.  The Watkins Firm will aggressively protect your interests and work to hold the majority interest to the high standards of California law while seeking to negotiate a path to efficiently resolve a shareholder dispute in San Diego or anywhere in California.

When negative decisions are being implemented by the Board of Directors or Corporate Officers a shareholder may bring a derivative lawsuit against the officers or Board on behalf of the company itself.  These cases require extensive legal expertise and skill, and the Watkins Firm has extensive experience in these cases.

Pro-Tip: “Well, first of all, let’s be clear. We’re talking about privately held companies. When you invest in a company down the street, that’s not on the New York stock exchange, you still become a shareholder and shareholders have rights. First thing you should think about when you become a shareholder is ‘like shareholders should be treated in a like or similar fashion.’ When you join a corporation by investing and you find out that someone with a similar shares as you is getting paid more dividends than you are, you are not going to like that. And you shouldn’t because that’s why we have different classes of shares. 

That’s why we have those rules. You have to look and find out if there’s a shareholder’s agreement, which could define who gets what and who gets paid. What, but generally speaking, if you want to pay people differently than what their ownership is, you should have a limited liability company. But if you’re selling shares, you’re still subject to shareholder laws in the state of California and other places. And those shareholders have a right to vote. They have a right to see certain disclosures. If you have over 5%, you get to see more financial documents of the company and you have a right to dividends. If other people are getting dividends, then you have a right to show up at this annual shareholders meeting and assert your own rights and interests.

Depending on how much one owns, what percentage of the company you own, you have a general right, to see the financial disclosures the company gets. If one is less than a 5% shareholder they have specific rights. And if they’re more than a 5% shareholder, they can go audit the company’s books and records. And sometimes they’ll be told they have to sign a non-disclosure agreement to do so, but they can literally give notice and appear in two weeks at the company offices and start making copies or investigating what’s going on with the company. Or if that doesn’t happen, we can literally file a motion in court and have a judge order that they be given access to the books and records of the company.

So are there protections for minority shareholders against wrongful actions by the majority interest or officers and directors. There are laws in place that protect them. But unless they have some type of shareholder agreement or some type of assurances or representations and warranties, then they just have the right to grievance in court.  They need our experience, advice and proven strategies.” – Dan Watkins, Founding Partner

Proven, Effective Tactics to Efficiently Resolve a Shareholder Dispute in San Diego or Anywhere in California

If you are a shareholder or investor in a San Diego or California corporation and are suffering mistreatment by the majority shareholders or corporate officers or directors we invite you to review our podcast Episode 14 – Shareholders’ Rights as well as the strong recommendations of our clients and contact the Watkins Firm or call 858-535-1511 for a complimentary consultation today. Learn about your rights as a minority shareholder and all we can do to protect your interests and efficiently resolve a shareholder dispute in San Diego or anywhere in California.