The Watkins Firm has more than four decades of experience protecting minority shareholder rights in San Diego and Southern California. While everyone has the best of intentions when a corporation is formed or when they buy into a corporation, their goals and objectives may change or fall out of alignment over the course of the years.
What Causes a Shareholder Dispute?
A shareholder dispute can arise for a variety of reasons, including the direction of the corporation or the distribution of profits. Sometimes it is as simply as the failure to adequately complete, maintain and update the shareholders’ agreement. My name is Dan Watkins, and after 40+ years of managing these types of disputes I can tell you the best way to prevent a problem with shareholders is to make sure the shareholders’ agreement is fully developed and implemented. Take the time, up front, to review all the potential clauses with our attorneys. The choices you make early on help to prevent issues down the road.
Those who hold the majority interest in the corporation may take what appear to be arbitrary actions that are not in the interests of minority shareholders. When the minority shareholder(s) ask to assert their rights to inspect the books, shareholder lists and/or corporate documents or request meetings to discuss their issues the majority may simply freeze them out, or exclude them from the decision making process.
The Watkins Firm – 40+ Years of Protecting Minority Shareholder Rights in San Diego
Minority shareholders have rights under California law. Even if the corporation was formed under another state, if it is a California business the minority shareholders have specific rights. The Watkins Firm provides options with the goal of protecting minority shareholder rights in San Diego and the surrounding area. The goals and objectives of our clients establish the strategy we pursue.
We may be able to negotiate or force a favorable buy-out of the minority shareholder’s interest. Minority shareholders can bring a derivative lawsuit or action against the majority stockholders on behalf of the corporation itself. Depending on the voting percentages, the shareholders may simply decide to voluntarily dissolve the corporation and divide the remaining profits and assets. Finally, the minority shareholders may need to file a lawsuit to force the “involuntary dissolution” of the company in the event of fraud, poor management or abuse of the powers of majority shareholders.
If you are looking for attorneys with extensive expertise, skill and experience protecting minority shareholder rights in San Diego we invite you to review our podcast Episode 14 – Shareholders’ Rights and Disputes as well as the strong recommendations of our clients and contact the Watkins Firm or call 858-535-1511 for a complimentary consultation today.
