Under New Jersey law, the term “minority shareholder" does not necessarily mean the person who owns less than half of a stock. A person could own 98% of the stock and still have redress under New Jersey’s minority oppression statute. Berger v. Berger, 249 N.J. Super. 305, 315 (Ch. Div. 1991).
The thrust of the New Jersey minority oppression statute is protection from the abuse exercise of power, not stock ownership percentages. Bonavita v. Corbo, 300 N.J. Super. 179, 187-188 (Ch. Div. 1996). The Court’s focus in determining whether an individual is a “minority shareholder" is not based upon a mathematical or mechanistic count of stock ownership percentages. Rather, the Court’s inquiry when determining who is a minority shareholder is based upon an inquiry of that person’s powers within the subject company.
Scott Unger is a Shareholder in Stark & Stark’s Lawrenceville, New Jersey office concentrating in Shareholder & Partner Dispute Litigation. For questions, or additional information, please contact Mr. Unger.