Majority ownership of a closely held corporation or LLC allows the majority shareholder to control the operations of the business, within limits defined by statute or organizational documents. This control, however, cannot completely disregard the interests of minority shareholders. Shareholder oppression claims can be used to ensure legitimate interests of minority shareholders are not ignored. But they can also be used by a dissatisfied minority shareholder to attempt to usurp a majority shareholder’s legitimate exercise of control. Working closely with accounting and business valuation professionals, we have become intimately familiar with the various ways in which majority shareholders have been alleged to have advanced their own personal interests at the expense of a minority owner. We are able to distinguish between the majority’s legitimate exercise of control and the egregious exclusion of the minority and determine what, if any, damages are owed.
We recently were victorious in the Texas Supreme Court in two cases in which we were defending majority shareholders, including one of the largest shareholder oppression cases of record. Although the plaintiff in that case was seeking to force the company to pay a $90 million dividend, judgment ultimately was rendered that the plaintiff recover nothing.