Minnesota corporate shareholder litigation commonly involves issues of shareholders’ rights, breach of fiduciary duties, minority shareholder oppression, wrongful termination of a shareholder, fraud, dividend rights, self-dealing, and shareholder derivative suits.
If you are a shareholder in a Minnesota corporation (not a publicly traded corporation), then you may have a number of shareholder rights:
- Right to Approve Gifts
- Right to Be Treated in Accordance with Your Reasonable Expectations
- Right to Employment
- Right to Honesty from Other Shareholders
- Right to Inspection (Access Company Information)
- Right to Loyalty of Other Shareholders
- Right to Oppose Self-Dealing by Other Shareholders
- Right to Share In Dividends
- Appraisal Rights
- Preemptive Rights to Buy Stocks (Right of First Refusal)
Sometimes, the majority shareholders or controlling shareholders oppress the minority shareholders. Fortunately, minority shareholders have a number of rights and legal protections under Minnesota corporations statutes. Minnesota corporate law has strong protections for minority shareholders.
Shareholder’s Derivative Suits
When the corporate officers, directors, or controlling shareholders of a corporation have misused the corporation’s funds—including for their own personal purposes—the remaining shareholders are provided the right to bring a shareholder’s derivative suit under Minnesota law. In a shareholder derivative action, the oppressed minority shareholders sue the controlling shareholders on behalf of the corporation for the harm/injury to the corporation.
After minority shareholders initiate a shareholder’s derivative suit, Minnesota law gives the corporation certain defenses including creating an independent Special Litigation Committee to examine the validity of the minority shareholders’ derivative claims. Shareholder’s derivative suits are complex, but an attorney experienced in Minnesota shareholder’s derivative actions can help oppressed shareholders or corporations fight these battles over control of the corporation and its funds.