Google Screened

Are You in the Healthcare Field?

Find Out How We Can Help »
[et_social_follow icon_style="slide" icon_shape="rectangle" icons_location="top" col_number="1" outer_color="dark"]
Millions Recovered For Our Clients No Fees Unless We Win

How Can I Enforce My Rights as a Shareholder?

June 27th, 2023
Philadelphia Shareholder Dispute Lawyers at The Gold Law Firm P.C. Can Protect Your Rights

Understanding your rights as a shareholder is essential. Shareholder disputes can be costly and time-consuming, so knowing your options can help you navigate these challenging situations effectively.

A shareholder dispute occurs when one or more shareholders disagree with the management or direction of a company. These disputes can arise for various reasons, such as:

  • Disagreements over company strategy: Shareholders may have different ideas about the company’s growth and direction, leading to conflicts.
  • Perceived mismanagement: Shareholders may believe the company’s management is not acting in its or its shareholders’ best interests.
  • Dividend disputes: Shareholders may disagree on whether dividends should be paid, the amount, or the timing of payments.
  • Breach of fiduciary duties: Shareholders may believe that directors or officers have breached their fiduciary duties, such as loyalty or care.
  • Minority shareholder oppression: Majority shareholders may unfairly prejudice the minority shareholders, such as excluding them from decision-making processes or diluting their shares.

Shareholder disputes can be incredibly disruptive to a company’s operations and result in costly legal battles if not resolved promptly and fairly.

Several options are available to shareholders in Pennsylvania for enforcing their rights in the event of a dispute.

Derivative Claim

A derivative claim allows a shareholder to bring a lawsuit against its directors or officers for alleged breaches of fiduciary duties, corporate waste, or other wrongdoings on behalf of the company. The shareholder must first demand that the company’s board address the issue, and if the board refuses, the shareholder can then proceed with the derivative claim. Any recovery in a derivative lawsuit goes to the company, not the individual shareholder.

Unfair Prejudice Claim

In Pennsylvania, minority shareholders have the right to bring an action for unfair prejudice if they believe that the activities of the majority shareholders or the company are unfairly prejudicial to their interests. This may include actions that affect the minority shareholder’s ability to influence company decisions or that result in a significant decrease in the value of their shares. Remedies for unfair prejudice claims may include an order to buy out the minority shareholder’s shares at a fair price or an injunction to prevent further prejudicial actions.

Breach of Contract

Shareholders may also have contractual rights that they can enforce during a dispute. These can arise from shareholders’ agreements, employment contracts, or other written agreements between the shareholders and the company. Shareholders can bring a breach of contract claim to seek damages or specific performance of the contractual terms.

Other Options

In addition to the above, there may be other legal avenues available to shareholders, such as:

  • Involuntary dissolution: Shareholders can petition for the involuntary dissolution of the company if they believe it is deadlocked or being mismanaged.
  • Inspection rights: Shareholders have the right to inspect the company’s books and records, which can provide valuable information in the event of a dispute.

Resolving Disputes Through Mediation or Arbitration

Litigation can be time-consuming and expensive, so it is often in the best interests of all parties involved to explore alternative dispute resolution methods, such as mediation or arbitration. These processes can provide a more efficient and cost-effective means of resolving shareholder disputes.

Mediation involves a neutral third party who helps facilitate negotiations between the disputing parties to reach a mutually acceptable resolution. Mediation is generally non-binding, meaning the parties are not required to accept the mediator’s proposed resolution.

Arbitration, on the other hand, is a more formal process in which a neutral third party (or panel of arbitrators) hears the case and makes a binding decision. Arbitration can be faster and more cost-effective than litigation, but it limits the parties’ ability to appeal the decision.

To take advantage of these alternative dispute resolution methods, including mediation or arbitration clauses in your company’s governing documents or shareholder agreements, is essential.

Philadelphia Shareholder Dispute Lawyers at The Gold Law Firm P.C. Can Protect Your Rights

If you are engaged in a shareholder dispute, it is essential to know your rights. To review your situation, speak with our Philadelphia shareholder dispute lawyers at The Gold Law Firm P.C. today. Call us at 215-569-1999 or contact us online to schedule a free consultation. Located in Philadelphia and Pennsauken, New Jersey, we serve clients in South Jersey and Southeastern Pennsylvania, including Wilkes-Barre, Scranton, Northeast Philadelphia, Bucks County, Chester County, Delaware County, Lehigh County, and Montgomery County.

The Gold Law Firm P.C.
Average rating:  
 0 reviews
View All Practices
2019 American Trail Lawyers badge
Lead Counsel Rated
life time achievement
million dollar advocates badge
AV Peer Review Rated
Philly Happening
Top one badge
Silver Client Champion Award 2020
super lawyers badge

As Seen On

avvo Martindale Justia FindLaw
© 2024 The Gold Law Firm P.C. All rights reserved. [ Site Map | Privacy Policy ]

Attorney Advertising Materials. Sidney L. Gold is responsible for the content of this website. This website is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship.

Website Accessibility: The Gold Law Firm P.C. is committed to ensuring digital accessibility for people with disabilities. We are continually working to improve the accessibility of all content on our website and applying the relevant accessibility standards.

* The awards and accolades displayed on this website were issued to the attorneys, or the entire law firm by the respective providers of these honors. They are as follows, Avvo Inc., Super Lawyers®, Martindale Hubbell Peer Review Rated, ASLA Top 100 Lawyers, Million Dollar Advocates Forum, Legal Leaders Top Rated Lawyers, Bar Register Preeminent Lawyer, Happening List Winner, BBB Accredited Business, National Association of Distinguished Counsel Top 1 Percent, America's Top 100 Attorneys, The Employee Rights Advocacy Institute for law and policy, Best Lawyers, Lead Counsel Rated, Top Employment Lawyers in Philadelphia, Association of American Trial Lawyers Top 100 and Martindale Hubbell Client Champion Silver. No aspect of these advertisements have been approved by the Supreme Court of New Jersey.