Disagreements between shareholders or partners are distracting, expensive, and often pose a serious threat to a business’s future. At Dressel/Malikschmitt LLP, we advise businesses, business partners, shareholders, and investors in New Jersey and beyond on the best way to resolve these disputes.
We are a business-minded law firm with extensive experience handling everything from allegations that someone has breached their fiduciary duties to multi-million dollar commercial disputes.
Whether inside the courtroom or at the negotiating table, we find a solution that allows the parties involved to move forward. We focus on getting our clients back to business so they can continue to innovate and grow.
What is a Shareholder or Partnership Dispute?
It is common for business partners and shareholders to have different preferences and priorities that they must reconcile if they want to continue working together. A little healthy debate can keep things fresh and focused, but when a small spat grows into something much larger, it can be a problem.
When a disagreement between partners or shareholders limits the ability of the business to continue operations, or poses significant legal risk, it is time to consult Dressel/Malikschmitt LLP. Firm founders Andrew Dressel and Chris Malikschmitt can help negotiate a resolution, or if necessary, litigate the dispute in court.
Common Shareholder and Partnership Disputes
Dressel/Malikschmitt LLP can help partnerships and closely-held corporations successfully resolve disagreements over:
- Management of the business: This can include anything from disagreements about the business model to allegations of embezzlement or self-dealing.
- Oppression of minority shareholders: When an owner or group of owners is using their majority interest to cut minority owners out of the decision-making process or prevent minority owners from being fairly compensated.
- Breaches of the partnership or shareholder agreement: Business relationships are governed by the documents creating them. When an owner strays from the terms they agreed to abide by, they can be held legally responsible.
- Breaches of fiduciary duties: Business partners owe the business and one another the duties of loyalty and care. When one or more partners are attempting to line their own pockets instead of making the business as a whole a success, a breach has occurred.
- The ownership and use of assets: Misappropriation of assets is a common accusation in business disputes.
- Distribution of profits: Suggestions that executive compensation or management fees are preventing the fair distribution of assets are common. As are cases where the company is not issuing dividends, shares, or equity as expected.
- Dissolution and partition or sale of the business: Whether a business is being transferred to the next generation, divided up because of a divorce, winding down so the owners can enjoy retirement, or one owner is forcing a buyout or sale, there are many legal issues that can arise.
- Failure to furnish corporate documents or allow for the inspection of books and records: Minority partners and shareholders have the legal right to view copies of business records.
These are just a few of the more common shareholder and partnership disputes that exist. But they are not the only ones. Our experienced attorneys are ready to resolve even the most acrimonious or unusual disagreements.
How a Business Dispute Attorney Can Help
When the Dressel/Malikschmitt team is called on to resolve a shareholder or partnership dispute, we know that work we are doing is the means to an end, not the end goal. We talk with our clients to determine what their actual goals are, and then figure out how to help them move in that direction.
In many shareholder or business partner disputes this involves:
- Inspection of books and records: All business partners and shareholders have a legal right to inspect the books and records of the companies they hold an interest in. But the people in control of those items are often reluctant to hand them over. We frequently get our clients access to accounting records and other documents like board meeting minutes, contracts, shareholder or partnership agreements, and information on litigation the company is involved with.
- Business valuation: When a business is being sold, or one partner is buying out another, or the ownership structure is changing in some way, it is important for all of the parties involved to know the true value of their assets. Getting a fair assessment that will hold up in court is critical.
- Actions for partition and dissolution of the company: If a business dispute cannot be satisfactorily resolved, a disgruntled partner or shareholder may have the right to demand a buyout of their ownership interest in the company. Or they may be able to seek the partition and dissolution of the entire company.
In many shareholder or business partner disputes this involves:
- Inspection of books and records: All business partners and shareholders have a legal right to inspect the books and records of the companies they hold an interest in. But the people in control of those items are often reluctant to hand them over. We frequently get our clients access to accounting records and other documents like board meeting minutes, contracts, shareholder or partnership agreements, and information on litigation the company is involved with.
- Business valuation: When a business is being sold, or one partner is buying out another, or the ownership structure is changing in some way, it is important for all of the parties involved to know the true value of their assets. Getting a fair assessment that will hold up in court is critical.
- Actions for partition and dissolution of the company: If a business dispute cannot be satisfactorily resolved, a disgruntled partner or shareholder may have the right to demand a buyout of their ownership interest in the company. Or they may be able to seek the partition and dissolution of the entire company.
Whatever path a dispute takes, Dressel/Malikschmitt’s team aggressively defends our clients’ interests. We provide the custom service of a boutique law firm and the knowledge of a large name-brand law firm, which is why the partners and shareholders of many New Jersey businesses rely on us when disagreements arise.
Speak With a Shareholder and Partnership Disputes Attorney
Each client we counsel, like each business they own, is different from the next. There is no one-size-fits-all solution when a shareholder or partnership dispute arises. That’s why the Dressel/Malikschmitt team takes the time to truly understand the needs and end goals of our clients.
We craft custom legal solutions that protect our clients’ interests, and address the root cause of the partnership or shareholder disagreement at hand so everyone can get back to business. Please contact us today to schedule a meeting.
Shareholder and Partnership Disputes FAQs
Our firm has successfully resolved a wide variety of shareholder and partnership disputes. No two cases are ever exactly alike, but there is a good chance that we have handled a situation that is similar to whatever it is you are dealing with. The most common scenarios involve owners who refuse to share management or financial information with one another, and forced buyouts or sales.
The answer to this question depends on how you fill in that blank and the terms of your partnership agreement. We would be happy to listen to your complaints and advise you of your options.
The partnership or shareholder agreement you signed when you joined or created the business will likely dictate what steps you can take if you disagree with the direction your company is headed. Whether you want to try and set things right, seek a buyout, or shut things down, Dressel/Malikschmitt LLP can advise you of your options.
Shareholder and partnership disputes are often difficult to resolve because the parties involved are deeply invested in the outcome. And we don’t just mean financially. Business owners pour their heart and soul into their businesses, and will often fight to the bitter end because of this. That’s why these cases are sometimes called business divorces. If a settlement cannot be negotiated, and a case heads to trial, it can take years to wrap things up. Cases that go to trial, and are then appealed by the losing party, take even longer to resolve.