What is shareholder oppression in California and what are the rights of a minority shareholder in San Diego and Southern California?  Shareholder oppression is a term which was originally developed in court cases outside of California.  Shareholder oppression generally occurs when the minority shareholders of a privately held corporation are deprived of their legal rights or suffer a “squeeze out” designed to reduce the value of their holding or the benefits their shares should provide.

Examples of shareholder oppression include but are not limited to:

Failing to declare an appropriate dividend

Removing a minority shareholder from the Board or terminating them as an employee of the corporation

Commingling of corporate funds or assets or distributions for the benefit of majority shareholder(s)

Excessive compensation for majority interests

A merger or acquisition which is designed to dilute or eliminate the value or benefit of the minority interest

Presently, California does not have any specific “tort” or cause of action specifically related to the term “shareholder oppression.”  However there are several other remedies for minority shareholders which are available under California law.  The shareholders rights attorneys at the Watkins Firm work with our clients to determine the best strategy to resolve minority shareholder disputes and shareholder oppression cases.

The Watkins Firm has several strategies which are designed to assert your rights and receive the value or benefit of your holdings.  The first option is to simply sell your position in the corporation if possible.  In many cases it isn’t possible to achieve an appropriate selling price or to recover your investment.  It is absolutely possible to implement a strategy which is designed to induce majority shareholders to buy out your interests for a fair price.  You may seek to involuntarily dissolve the corporation, exercise dissenting shareholder rights or file a derivative lawsuit on behalf of the corporation.  The Watkins Firm may file a civil lawsuit claiming a breach of the majority shareholder’s fiduciary duty to you as a minority shareholder under California law.

It is important to understand what is shareholder oppression in California and the rights you hold as a minority shareholder.  We invite you to contact the Watkins Firm or call 858-535-1511 for a free consultation.  Learn more about the strategies and options which are available to you and how the Watkins Firm can help to assert your rights and protect the value and benefit of your holdings.


Contact a Business Law Or Real Estate Attorney Today

To set up a free, no-obligation consultation with our knowledgeable San Diego business lawyers, call us at 858-535-1511 or contact us online.