Sadly, millions of once aggressive stock traders who’ve spent eons seemingly making sound investment decisions suddenly find themselves dubbed as an oppressed minority shareholder. True to definition, minority shareholders own less than 50% of overall company shares, thereby foregoing many opportunities available to majority owners.
Since many major stakeholders have control over board member elections, rather unkind actions are often executed towards the lesser share owners which include squeeze-outs, refusal of dividend declaration and even termination of employment. Fear not, my restless soldier: below are available remedies minorities can use when feeling bullied out of clout.
Seeking judicial relief may come across as weak to some, yet majority shareholders have moral duties to report activity to all involved with corporations offering share purchase opportunities. Lawsuits which prove misappropriation of funds and force wrongdoers to face up to their actions would wake up those feeling ‘ballsy’ enough to bully minority shareholders. Sure, prevailing conditions which caused oppression must be proven yet shouldn’t be entirely difficult given certain levels of abuse transpire when squeezing or involuntary buyouts take place.
When wrongdoings have led to court proceedings, often times both parties will find that simply allowing the majority holders to gobble up all minority shares will absolve the quandary quicker than drawing out days of confessions, witnesses and spending community volunteer hours bored to death in jury boxes. In forced buyouts, judges will order the current fair market value of each share to be paid so as to resolve any further conflict. In the greatest number of oppressed minority shareholder cases, buyouts perhaps squash the greatest number of legal cases.
Extraneous cases of oppression within shareholders could lead to corporate liquidation which, of course, leads to closure. Several days of court battles would ensue, much would have to be proven yet in severe cases of provable shareholder subjugation, powers that be would have little qualms about shutting down Fortune 500 companies considering the duty that each company has to their shareholders regardless of percentage owned.
Fewer cases of corporate dissolution are reported simply because two or three minorities would find excessive difficulty in overthrowing majority shareholders whereas several dozen would actually be enough to raise eyebrows.
Of course, mediation would also help smooth things over between your hungry shareholders, and your current situation. Many mediators simple officiate discussions while keeping legality in check for everyone involved. Many great mediation services from Edmonton to Eugene could assist in helping you fend off shareholder oppression or any unruly fiduciary fouls being committed by your supposedly trustworthy comrades.
Due Diligence Could Prepare You…
Perhaps one massive self-purported error oppressed minority shareholders are guilty of revolves around not properly performing due diligence before investing in company shares. Always prevent potentially dangerous situations simply by finding out what could potentially be faced when investing in companies that have little financial or moral backbones.
In close, never purchase anything without either legal or professional investment counseling, the single most important ‘fine print’ explanatory source which many people aren’t afforded during times of investment need.