As the economy decelerates, many businesses are finding that conflicts between shareholders and business partners that had been simmering beneath the surface for years are finally coming to a head. The previously booming economy helped to mask those problems, since there was less of a reason to act on them. As a result of recent slowdown in the overall economy, and the increase in interest rates, shareholder and partner disputes are becoming more common.

Consider that these business disputes almost always arise amongst business partners who once trusted and liked one another. Whether they are family members, or simply people who once worked together to build a company, it highlights the fact that no one is immune from becoming involved in a business dispute, partnership dispute, or shareholder dispute.

When disputes arise over a shareholder being terminated, a situation involving something as sinister as embezzlement, or simply results from an uncontrollable “power trip” by majority shareholders, there is a common theme to all such cases: Everyone attempts to re-write history.

Sometimes the “re-creations” are founded on a genuinely-held belief of how things transpired. Other times, of course, people just plain lie. Regardless of motivation, if you are involved in a shareholder or partnership dispute it is never too early to start protecting yourself from revisionist history. Since things are easier to prove when in writing, start creating a paper trail once you sense a showdown on the horizon.

One of the first questions a business lawyer will ask is whether a Shareholders’ Agreement or an Operating Agreement exists. A Shareholders’ Agreement or Operating Agreement may contain buy-sell provisions or valuation provisions that may be relevant, or even dispositive, in a dispute. These agreements frequently determine the outcome in the event of death, disability, divorce, termination of employment, or the sale of an individual’s interest in the business.

The business lawyers at Lustig & Wickert have had decades of experience resolving disputes between shareholders, business partners, limited liability company members, managers, and joint venturers. We are frequently called upon to provide advice and counsel to our clients and advocate on their behalf in negotiation, mediation, alternative dispute resolution and litigation in the following areas:

• Breach of fiduciary duty
• Buyout agreements, and buyout rights
• Corporate deadlock
• Embezzlement
• Executive compensation
• Freeze outs
• Minority ownership rights
• Self-dealing (pursuing business opportunities for oneself that conflict with the best interests of the company)
• Shareholder appraisals
• Shareholder disputes
• Shareholder oppression
• Valuations

We also have extensive experience in shareholder dispute litigation including seeking temporary restraining orders, preliminary injunctions, permanent injunctions, accounting’s, dissolution, money damages, and shareholder derivative actions. We have been successful in having minority shareholders’ interests valued by the court and purchased by the other shareholders.

There are many ways to protect oneself in the event of shareholder disputes or business partner litigation. Because we practice in this area regularly, we are familiar with the law and the strategies most commonly used. Call or email us today to schedule a free and confidential consultation to see if you can benefit from our extensive experience in shareholder disputes and partnership disputes.