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I am shareholder and manage a department- it is a closely held corporation. Only 3 shareholders, all 3 involved in managing. In a duly notice meeting, the majority of the BOD terminated my employment. I want to know what are my rights as a 1/3...
In Massachusetts each shareholder in a closely held corporation owes a fiduciary duty to the other shareholders. A series of cases dating back 30 years have successively clarified the legal standards that apply.
In general, in each case involving a challenge by a minority shareholder, the court must first ask “whether the controlling group can demonstrate a legitimate business purpose for its action.” If the majority meets this initial test, then the burden shifts to the minority shareholder to show “that the same legitimate objective could have been achieved through an alternative course of action less harmful to the majority’s interest.” The courts “must weigh the legitimate business purpose, if any, against the practicability of a less harmful alternative."
Your question implies there was no legitimate business purpose for the corporation’s action and, therefore, you may be entitled to relief; however, it is not possible to render legal advice in this forum. Contact an attorney to determine your rights and the potential remedies available to you based on your particular circumstances.
Best wishes!See question
My financial adviser was told by me to sell a Reit that I own for a tender offer of $11 a share. This had to be done by a certain date. He forgot or overlooked doing this, but sold it after the drop dead date for a substantial loss difference. Is ...
The losses likely can be considered investment damages based on the information given. Relevant considerations concerning negligence will include the clarity and form of your communications with the representative. (Oral instructions are suggested by the question. Given the instruction to execute by a certain date, written instructions in follow up may have been prudent; however, oral instructions can form the basis for a claim). FINRA is an efficient forum, but arbitration is not particularly quick, nor is it easy. Should you wish to pursue a claim, I agree with advice to move quickly to consult with an attorney. Besides the legal barriers that come up over time, your ability to persuade a panel about instructions unfollowed will diminish over time. By seeking help now you can appropriately demonstrate your displeasure en route to asserting your claim appropriately, or take other pre-claim steps guided by counsel. I would be happy to chat for a free consultation. I am a FINRA arbitration specialist. More information about my practice is available at www.law-holland.com.See question