Deadlock arises in evenly divided ownership or board structures where no faction can act. Statutory remedies include judicial dissolution, provisional director appointment, and custodianship.
Contractual mechanisms may resolve deadlock without litigation.
Alternative Names:
Deadlock|Governance Deadlock
Why it Matters?
Contractual deadlock-breaking mechanisms are substantially cheaper than judicial remedies, and shotgun buy-sell provisions, tiebreaker directors, and mandatory mediation resolve most impasses without a petition. Their absence in fifty-fifty structures is a predictable failure that owners rarely address at formation. Where litigation is required, the provisional director remedy preserves the business while dissolution destroys going-concern value.
Frequently Confused with
Related terms
Frequently asked questions
What resolves deadlock without litigation?
Which judicial remedy preserves value?
