Shareholder oppression occurs when the majority shareholders in a corporation take action that unfairly prejudices the minority. The majority shareholders may harm the economic interests of the minority by refusing to declare dividends or attempting a squeezeout.
How to prove shareholder oppression?
Proving Shareholder Oppression
- Engaged in conduct that is contrary to the interest of minority shareholders.
- Engaged in conduct that is oppressive, prejudicial, and/or discriminatory towards minority shareholders.
What is minority shareholder oppression?
In general, minority oppression includes conduct that is: contrary to the interests of the shareholders as a whole; or. oppressive to, unfairly prejudicial to, or unfairly discriminatory against a shareholder or shareholders.
When is the oppression remedy available to shareholders?
The oppression remedy is a personal remedy available to stakeholders, including shareholders, to be asserted in situations where a corporation is unfairly prejudicial or unfairly disregards the interests of the stakeholder. The complainant sues on behalf of himself for a wrong he suffered personally as a result of corporate conduct.
Is there evidence of oppression of a minority shareholder?
A claim of oppressive conduct to a minority shareholder can be independently supported by evidence of a variety of conduct. The finding of oppression of a minority shareholder is usually based on more than a single oppressive act. Rather the courts focus on a pattern of conduct.
Can a breach of an agreement prove shareholder oppression?
Minority shareholders should note that, while breach of an agreement may be evidence of oppression, shareholder oppression claims will not necessarily save minority shareholders from the agreements they made at arm’s length. 26 Shareholder employment is another issue that frequently arises in the context of shareholder oppression litigation.
Who is a complainant in an oppression remedy?
The complainant sues on behalf of himself for a wrong he suffered personally as a result of corporate conduct. A claim for an oppression remedy can be asserted by shareholders against other shareholders (minority or majority or equal), officers, directors, or creditors and can cover a huge range of misconduct.
