Shareholder Disputes and Litigation
Gentleman Law helps companies with business issues including shareholder litigation and shareholder dispute cases. Shareholder Disputes - Chicago Attorney.
Shareholder Disputes Lawyer – Chicago, IL
When the owners of a business disagree, the outcome can be devastating. Although in a perfect world all shareholder disputes could be settled with an informal conversation over a cup of coffee, the reality is that sometimes something that begins as a simple misunderstanding between shareholders can grow in scope and severity until it becomes a major issue requiring litigation or mediation to resolve. In the most drastic cases, a shareholder dispute can even result in the eventual destruction of a business.
We know a great deal about the business of running a corporation. We know the roles the various players have, and the rights and responsibilities of each one. We know how important a properly drafted shareholder agreement can be in resolving disputes, and we know how to protect your business by acting proactively. Here are a few things you should consider when you are putting together plans for addressing a shareholder dispute.
When a shareholder dispute arises, it is frequently due to the misbehavior of one of the shareholders. When a shareholder has acted in such a way as to harm the business, you need the assistance of a seasoned corporate attorney in order to accurately assess the impact of the action.
For example, if a shareholder violates his or her fiduciary duty to the business, determining exactly what harm the business suffered as a result is an important part of any civil suit. Analyzing a business’s operations and determining the financial impact of a breach of a shareholder’s fiduciary duty is a task that requires a highly-trained professional who knows the ins and outs of corporate law, industry standards, and various valuation methods employed in different situations.
Similarly, if a shareholder or senior employee violates a non-compete agreement the task of measuring the resulting harm to your business requires the assistance of a lawyer who is familiar with the methods of measuring the fiscal impact of such matters. Regardless of your specific situation, we are here to help you determine the extent to which a shareholder dispute has—or may—impact your business. This information can be of use to you in settlement discussions with the shareholder in question.
Probably the single largest step a business can take when it comes to shareholder disputes is to anticipate the occurrence of such disputes and have in place a mechanism for reducing the likelihood of it actually taking place (or minimizing its impact when it does). For this reason, we suggest that you consult a corporate attorney who is familiar with shareholder disputes and will be able to leverage that knowledge into the production of strong shareholder agreements, non-compete agreements, and other similar documents that will assist in the resolution of a shareholder dispute.
Further, educating employees and shareholders ahead of time is sometimes the best way to prevent a dispute before it can become an issue. An employee will have different rights and obligations than a shareholder. A director will have still other rights and obligations. By ensuring that everyone is clear as to what role they are playing—something that is not always as simple as it sounds, especially in smaller, closely-held corporations—you can assist in reducing the chances of a costly misunderstanding.
You should also be aware of the risks of each course of action you may be considering. Many shareholder disputes have come into being because a shareholder was not clear about what would happen if he or she engaged in a specific activity or made a specific decision.
Be clear about what you do and do not own
Sometimes shareholders are not completely clear about their own status. They may know that they own an interest in a corporation, but they may not know exactly what type of interest they own or how that interest empowers them to act. Or, they may not be aware that they can force another shareholder to sell his or her shares in the corporation in the event of certain circumstances (this is known as a “forced buy-out.”) Likewise, they may not be aware that they themselves can be forced to sell their interest to other shareholders.
It is important that you be clear about your interest, and about your rights. For this reason, it’s a good idea to regularly contact a corporate attorney to review your status in the corporation.
We are here to help you. If you ever have a question about an issue you are facing, or if you are wondering what could happen if you pursue a specific course of action, we want you to call us. It’s better for you to know at the outset what your exposure is than it is to wait until you have already performed the act in question before finding out what the result might be. Call us and let us help educate you so you can make the best decision for yourself, and for the business that you have poured yourself into.
Turn to an experienced Illinois shareholder dispute attorney for reliable advice and guidance
Gentleman Law has been helping clients with business law and shareholder disputes for more than 16 years. Call (312) 741-1039 or contact Gentleman Law online today to discuss your case, free of charge. The office is centrally located in the Loop near Daley Plaza just steps from the Cook County Courthouse and the federal courthouse. Spanish is spoken in the office for your convenience.