Oppression includes withholding distributions, terminating employment, excluding from management, and diluting ownership in closely held companies. Remedies include buyout, dissolution, and damages.
The reasonable expectations standard governs in most states.
Alternative Names:
Shareholder Oppression, Freeze-Out
Why it Matters?
Close corporations generate these claims because minority holders have no market for their shares and depend on employment and distributions the majority controls. The reasonable expectations analysis looks to what the parties understood at investment, which makes founding documents, employment arrangements, and distribution history the evidence. Buyout at fair value is the common remedy, and valuation becomes the actual dispute.
Frequently Confused with
Related terms
Frequently asked questions
Why do close corporations generate these claims?
What is the common remedy?
