Shareholder conflicts can become complex and damaging to production and reputation. Depending upon the size and reach of an organization, conflicts arising among the shareholders can cause stress and discourse among large numbers of people. Business owners and executives who are facing the difficulties of a shareholder conflict in California might be interested to learn about the current situation involving Dissident CommWealth REIT.

Reports indicate that CommonWealth has been criticized for its management fee structure. Activist investors have attacked the organization, claiming they have been undervalued. Now, major shareholders have called for a vote to oust the company’s board. This effort comes on the heels of a rejected takeover offer submitted by the shareholders in February. CommonWealth’s board rejected the takeover in April and believes shareholders should concentrate on company strategy.

Some investors believe the removal of each member of CommonWealth’s Board of Directors is justified because of “dismal returns to shareholders over an extended period prior to the dissidents’ arrival.” It is also believed that there are conflicts of interest in the company’s external management structure. The conflicts of interest are alleged to have had a direct effect on crucial drivers of shareholder value.

Regardless of the type of shareholder conflict a company faces, difficulties can arise. During the course of a conflict, it is not uncommon for both day-to-day business and overall reputations to be damaged. One successful way to combat this type conflict is by utilizing the right legal support. Thankfully, California companies do not have to face the perils of shareholder conflict alone.

Source: The Wall Street Journal, “Dissident CommonWealth REIT Shareholders Say ISS Backs Removal of Board,” Melodie Warner, June 14, 2013