How are shareholder disputes resolved here in San Diego and across the State of California? What are some of the options for successfully managing a minority shareholder dispute in a timely, cost-efficient manner?  If a dispute arises between a California company and one of its minority shareholders or investors, are there any other potential solutions than simply buying them out?

While a lot will obviously depend upon the unique circumstances of each case as well as the specific provisions of the operating agreement (LLC) or shareholder’s agreement, California has taken extensive legislative action to protect and preserve the rights of minority shareholders or members in our LLCs and corporations.

The Watkins Firm has 40+ years of experience serving the business, science and tech, real estate and medical / healthcare communities here in San Diego and across California. There are multiple options for resolving disputes involving shareholders or investors.  You should be pleased to learn the Watkins Firm is able to resolve the majority of our shareholder dispute cases through effective, leveraged negotiation.  This is the fastest and most cost-effective option for resolving a business dispute.

How are Shareholder Disputes Resolved in Most Cases?

How are shareholder disputes resolved in most cases here in California? The Watkins Firm has 40+ years of experience serving the business, science and tech, real estate and medical / healthcare communities here in San Diego and across California. There are multiple options for resolving disputes involving shareholders or investors.

You should be pleased to learn the Watkins Firm is able to resolve the majority of our shareholder dispute cases through effective, leveraged negotiation.  This is the fastest and most cost-effective option for resolving a business dispute.  Business mediation and arbitration are also alternatives for resolving your shareholder dispute.

Many of the available remedies are described within the operating agreement or shareholders agreement.  Our attorneys can request action from majority shareholders or a Board of Directors.  In many cases, a simple demand letter from the Watkins Firm can remind the majority of your rights and their responsibilities.  This is often enough to correct bad behavior and get our clients access to the information they need to protect their investment.

Pro-Tip: “For example, we’ve, 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 some law firm like ours and they say, “well, let’s get in there to see 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 you come to the Watkins firm 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 very tempting for human nature to turn that down. Money makes people do some strange things.

We had a case where a doctor left work on a Friday, and when he returned to his practice on Monday the building was locked and his partners had literally moved the practice and the bank accounts and everything (even the website), trying to cut him out.  Let’s just say that didn’t work out very well for the other partners.” – Dan Watkins, Founding Partner

The company may attempt to buy out the minority interest, or even merge the existing company into a new entity while diluting or devaluing the rights of existing minority shareholders.  You wouldn’t believe some of the tactics we’ve witnessed over the years. If you suspect improper, illegal or fraudulent business activity you must assert and protect your rights as a minority shareholder.

The San Diego shareholder’s rights lawyers at the Watkins Firm are prepared to apply our more than four decades of experience and legal skill in these matters to help protect your interests and investment, while working to ensure the best possible outcome in your unique circumstances.

The first step you should take when considering your options for minority shareholder business dispute resolution in San Diego is for 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.

We will discuss the dispute or issues at hand, your goals and objectives, and then develop strategies to accomplish those goals.  There are several other options and actions we can take to protect and enhance your position, and effect an outcome that resolves the dispute in your favor.