Resolving Shareholder Disputes Without Destroying Your Business

Shareholder disputes in NYC do not have to threaten the short or long-term viability of your company. The better informed you are, the better decisions you can make for your business. Our office serves clients during settlement negotiations, arbitration, and litigation. When it comes to resolving complex disputes efficiently, there is no better attorney to contact than the Knox Law Group.

Breach of Fiduciary Duty: A Common Cause for Disputes

A breach of fiduciary duty is among the most common reasons for a shareholder dispute. When a person acts as a fiduciary he or she is duty-bound to act in the best interests of someone or something else. When a fiduciary does not act in this way, that can create ethical issues that lead to shareholder disputes.

Misconduct by majority shareholders or financial mismanagement within the company can both threaten to create a hostile environment where shareholder disputes may arise. Acting in a manner that is unfit for a company’s decision maker is enough to cause a great deal of stress and anxiety in a workplace. From there, a shareholder dispute can lead to a significant amount of disunity amongst employees.

What Type of Lawsuits Occur in a Shareholder Dispute?

In a direct action, one shareholder may file a lawsuit to stop the harm done to their ownership rights in the company. When a shareholder is unable to vote their shares or cannot receive profit distributions, then a direct action may be filed. Since the action seeks to address specific problems related to their ownership shares, any damages won usually stay with the shareholder who filed the lawsuit.

The other type of lawsuit related to shareholder disputes is a derivative action. A lawsuit of this type is filed on behalf of the company as a whole. When a shareholder’s bad actions result in harm to the company, then a derivative action can be filed. Even though an individual shareholder can file a derivative action, damages won in the lawsuit are usually paid to the company rather than the individual who filed suit.

Facing a Shareholder Dispute in NYC? Contact the Knox Law Group Today

An experienced NYC shareholder dispute attorney, the Knox Law Group, understands that taking the first step towards fostering meaningful discussion and resolution can be the most difficult. We are equipped to handle the shareholder dispute matter impacting your business. Contact us today for a consultation where you can ask questions, receive feedback about your circumstances, and build a strategy with this team of legal professionals.