In a closely held corporation, what rights do shareholders have against a director/majority shareholder who takes money?

Asked over 1 year ago - Granada Hills, CA

This is in California. The majority shareholder/director (ms/d) may have simply taken money, may have made negligent decisions or violated rules. The property owned by this corporation is currently about an acre San Fernando Valley. Ms/d says that despite 3 large buildings completely rented that it made NO money this past year (may have simply decided to take profits as pay for himself?).

Separately, the ms/d refuses to hold shareholder meetings, nor inform one of the shareholders of any details. The corporation may be suing a former tenant, but ms/d has refused to release info regarding the lawsuit, or the potential negligent mistakes the ms/d may have made. Tell me what kind of attorney/specialization I should be looking for? There are leases, wills, shareholder's rights issues.

Attorney answers (1)

  1. Michael Charles Doland

    Contributor Level 20

    4

    Lawyers agree

    Answered . A business litigator.

    Sadly, this is not uncommon behavior, and the law is pretty well established regarding breach of fiduciary duty, conversion (civil theft), the right to an "accounting", the right to force the holding of meetings and depending on the facts, many more causes of action.

    You will need to assemble all the documents you have in your possession when you see the lawyer. You should reduce all the background and "facts" to writing to help the lawyer. If you have specific goals or issues, it will be clearer if they are reduced to writing.

    The above is general legal and business analysis. It is not "legal advice" but analysis, and different lawyers may... more

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