Particularly in closely held business, minority shareholders often complain that they are treated unfairly by the majority.  The rights of the parties are defined by statute and by the organizational documents such as Limited Liability Company Operating Agreements and Corporate Bylaws.  Often, stakeholders are also employed by the company and believe that they are entitled to continued employment simply by virtue of their ownership interests.  Other times, stakeholders are deprived of their perceived right to receive distributions of profit based solely upon their ownership interests  Both sides have rights in such cases, and often those rights are not clearly defined by the organic documents or by statute.  Fedder & Janofsky has extensive experience in representing both majority and minority shareholders in such matters, and is often retained by the disagreeing parties to assist in mediating a constructive business solution.

In other cases, controlling shareholders have been found to abuse their position of power by taking actions that are not in the best interest of the shareholders as a whole.  These actions could be as bad as fraud or embezzlement, or simply unfair or oppressive toward the other shareholders.  We have frequently advised clients who have no other recourse than to go to outside counsel to address their grievances.  In some cases, we have filed shareholder derivative actions on behalf of the corporation against its controlling shareholders, officers and directors.