Shareholder disputes litigation and arbitration is a complex area of law. That is not to say that this area of law is complicated or difficult, as complexity does not evoke difficulty.
It is complex because it has countless conceptual and practical components.
Shareholder disputes often involve a minority shareholder who feels mistreated, cornered, excluded, or worse, finds her shareholding interests diluted. Very often, particularly in private companies, by the time legal counsel is sought, the dispute has little chances of pre-litigation reconciliation. Most shareholders disputes that come to lawyers to rescue then lead to costly and time-consuming litigation. Often, these disputes lead to a minority shareholder or business partner leaving the company.
Shareholder dispute claims are typically classified as either dissenting shareholder actions or minority oppression actions. Some of the most common events triggering shareholder disputes include:
- Deceptive practices
- Diversion of income
- Involuntary dissolution of a business
- Non-payment of distributions
- Breach of contract