Scott I. Unger, Shareholder in Stark & Stark’s Shareholder Oppression Group, authored the article, The Minority Oppression Statute, for the June 2012 issue of Mercer Business Magazine.
The article discusses the amended Minority Oppression Statute which enables minority shareholders to protect themselves from oppressive majorities in closely held corporations. Mr. Unger explains the different examples of minority oppression and how shareholders are affected by the Business Judgment Rule. He also discusses some of the factors that Courts consider when determining what is reasonable compensation at trial.
Mr. Unger states, “Minority oppression litigation will often times come down to the majority’s contention that it is governing or making decisions in the best interest of the corporation versus the minority’s assertions that those decisions were made in order to oppress the minority. So as to avoid minority oppression litigation, or to place the majority in the best possible light should litigation be commenced, majority shareholders should consider and document the business reasons behind their decisions. They should also be cognizant that the business judgment rule is not an absolute bar to the majority’s decisions.”
You can read the full article here.