It is clear from the decision of the New Jersey Supreme Court in Brenner v. Berkowitz,134 N.J. 488 (1993), that the majority’s conduct need not be fraudulent, illegal or even “wrongful” to constitute actionable “oppression” within the meaning of N.J.S.A. 14A:12-7.


In evaluating the majority’s conduct, particularly in close corporations of less than 25 individuals, courts must determine whether the majority has acted fraudulently or illegally, mismanaged the corporation, or abused their authority as officers or directors, or have acted oppressively or unfairly toward a minority shareholder as provided under N.J.S.A. 14A:12-7(1)(c). Oppressive conduct has been defined as including that which frustrates a minority shareholder’s reasonable expectations. Brenner, 134 N.J. at 506 (citing 2 O’Neal’s Close Corporations § 9.29 at 132 (Callaghan & Co., 3rd ed.1988)).


If you believe you are an oppressed minority shareholder and would like to discuss your situation in more detail, please contact me in my Lawrenceville, New Jersey office.