Settling a San Diego shareholder dispute doesn’t have to involve expensive and time consuming litigation. A shareholder dispute will disrupt the focus and profitable business operations of your company or corporation. However, most of these disputes can be resolved through our proven approach to cost-effective and timely dispute resolution.

The attorneys at the Watkins Firm have decades of experience guiding corporate shareholders, investors and business owners through the challenges that occur in their companies. Principled disagreements, personal crisis and even personality conflicts can arise from time to time and it is important to prevent these issues from interrupting the smooth operations of the company.

One of the ways of settling a San Diego shareholder dispute is to prevent them from ever arising in the first place. The shareholder’s agreement is a critical corporate document that establishes in advance the steps that will be taken in the event of a major life event or issue between shareholders such as:

• Death of a shareholder
• Buying out a shareholder’s interest
• Bringing in new shareholders
• Divorce
• Incapacitation or major illness of a shareholder
• Non-fulfillment of work duties or shareholder responsibilities

These issues are best negotiated up front in the shareholder’s agreement when everyone is excited about the new venture and working cooperatively and creatively in the same direction. If the shareholder’s agreement is unclear or mute on an issue, we assist our clients by working to negotiate a fair and reasonable resolution without the need for litigation. Often, corporate documents may require mediation or arbitration as an alternative means of resolving disputes, and our attorneys can represent you through these steps all the way through to the Courtroom if necessary.

Pro-Tip: “What can we do to help protect our clients interests, their shareholders agreement and their access to information?  Well, we like to say, if it’s off a penny, it’s off a million. So we look at the financial disclosures you’ve been given, and if they don’t add up or doesn’t seem straightforward, we suggest you demand for documentation. And if they don’t give it, that’s sort of like them pleading the fifth, you know, something’s wrong when they’re not willing to give their investors, their owners full access, full transparency into what’s going on with the company.

So that sense that you have that something’s just not right. That should also be a sense that maybe I should get some help. And you should do it right away. because, when shareholder fraud or a shareholder breach happens, it’s usually for a purpose. There is an opportunity for management. And it’s usually happening now.

And it’s probably a lot of money.  They usually won’t do something against your interests as a shareholder unless it’s really worth something.  What I’m talking about here is timing. If,let’s say you don’t have a shareholder agreement, or you have a weak shareholder agreement and management has broad discretion to do a lot of things, and they’re getting ready to do some questionable things, to make a big profit. And you come along and say, wait a minute, I think something’s wrong here. And you pose an objection. Well, before you file a lawsuit, this opportunity that management has is still there. So if you are the squeaky wheel right away, before they go forward with whatever they’re doing, then you may not only put a stop to it, you can profit from that. But if you’re not, then it’ll just happen. And instead of sharing in the profits, you’ll be fighting to claim you had rights to get some money back.

These cases also involve a conflict of interest between their obligation, their fiduciary duty, to their shareholders and their own personal interests. Everybody hears the term conflict of interest and they think it’s something like special or amazing or complicated, but it’s really not. This is the oldest con game. There is example you are working somewhere and you get access to checks coming in. So you go form a company in another state that sounds just like the name on the checks that are coming in. And you start taking those checks and putting them in your own bank account. Well, think about that. If you’re a corporation you’re in management and you have an uncle that forms a company and you start sending business that way, and before, you know it, you taking assets from one company and giving it to another company, which technically you don’t have anything in writing as an ownership of, but you have a conflict of interest and you’re breaching your fiduciary duty. And so if the shareholders aren’t watching, this kind of thing unfortunately often happens, and I would say 20% of our litigation every month is based on shareholder disputes fights between shareholders and the corporation and,  breach of fiduciary duty.” – Dan Watkins, Founding Partner

Settling a San Diego shareholder dispute involves a thorough examination of the facts and damages and working to negotiate a settlement which protects our client’s goals and interests.  If you are concerned about or are involved in a shareholder dispute we invite you to review our podcast Episode 14 – Resolving Shareholder 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.