The Watkins Firm has more than four decades of experience advising shareholders in a dispute in San Diego and throughout California.  If you are an investor or shareholder and you are concerned about the actions of majority interests, another shareholder, the Board of Directors or the direction of the company you should take action immediately and speak with the Watkins Firm for a free consultation at 858-535-1511 today.

What are the minority shareholder rights here in California?  What happens when the owners of a corporation breach their fiduciary duty through a conflict of interest, self-dealing or unfair business practice?  Has there been an issue of fraud?  Do you think a new merger may be an attempt to water down or eliminate your rights and the value of your shares altogether?  Has the company failed to pay dividends according to the shareholder agreement and corporate bylaws?  Are you concerned about a freeze out or achieving access to the records and financial information of the corporation according to your rights as a shareholder?

The Watkins Firm has been advising shareholders in a dispute for more than 40 years.  If you think there is something wrong you are probably right.  We work with shareholders who are attempting to protect their investment and rights as a shareholder against majority owners and other shareholders who are attempting to violate their rights or subject them to unjust treatment.  You should be pleased to learn we are able to resolve the vast majority of our shareholder dispute cases through effective, leveraged negotiation.  This is the fastest and least expensive path to protect your interests and achieve your goals.

We represent shareholders at any point in the dispute, from simply drafting a demand letter to protect their access rights to negotiation, mediation, arbitration and at trial.

Pro-Tip: “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 in the shareholders’ agreements and bylaws.  There are strong minority shareholder rights here in California. You have to look and find out if there’s a shareholder’s agreement, which could define who gets what and who gets paid. But if your company has sold shares, they are still subject to shareholder laws in the state of California and other places. Many 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.

For example, we’ve had so many shareholder fights where a group of friends or a group of friends who know friends, maybe 30 people, invest in a company and it’ll be doing well, but not great. And the investors, the shareholders won’t be receiving disclosures, or they will be receiving them, but they sort of don’t add up. And then they do an investigation and they come to the Watkins Firm and they say, ‘well, let’s get in there seeing the books and records.’ And you get some pushback from the company. And that’s when all the hairs in your neck stand up and we file a motion.

And we discover through our due diligence that the company’s doing very well and that they also formed an offshore corporation of the same name. And they’ve taken all the assets and they’re all driving Rolls-Royces. So this has happened more times than I can say, because it just does happen. Nobody fights over anything unless there’s money involved. If it’s just doing okay, they would tell the truth and say, it’s all great. But if that big money offer comes in the door and they have a way of keeping it for themselves, it’s unfortunately very tempting for human nature to turn that down.” – Dan Watkins, Founding Partner

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.