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Shareholder Rights Blog Topics

Fiduciary     DLOM

Family Business

Trustees     Fair Value

Shareholder Oppression

Shareholder Rights Blog

Welcome to the Holland & Knight Shareholder Rights Blog, featuring news, observations, and legal analysis related to shareholder rights, relations and disputes arising from the ownership of closely held businesses.

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Read this case study on a 50/50 ownership relationship and the lessons learned from it.
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March 13, 2017
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The question often arises whether a minority shareholder can require the majority to buy his interest in a privately held company. The answer, as a general matter, is that absent an agreement that provides for the purchase, the majority has no duty to buy or redeem the interest.
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January 4, 2017
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Shareholder Rights Blog Editor Mike Zdeb reflects on being recognized by his peers in Best Lawyers and four key areas of concern that he believes are critical issues for closely held companies and family businesses.
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September 16, 2016
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A recent article in the Real Property, Trust and Estate Law Journal discussed the phenomena of grantors of trusts "increasingly naming trust protectors, particularly for a trust that may endure for many years…." A number of other scholarly articles have been published in the last few years addressing the development of trusts under which some of the duties and powers of a traditional trustee have been sliced off and assigned to other "advisors." 
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April 13, 2016
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The Maryland Court of Special Appeals recently ruled in Oliveira v. Sugarman, -- A.3d --, 2016 WL 361055 (2016), that a Maryland board's rejection of a shareholder demand is subject to the presumption of the business judgment rule – and not subject to heightened scrutiny – where a majority of disinterested and independent directors rejects the demand.
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February 11, 2016
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A recent Texas court of appeals decision bucks the prevailing view when it comes to fiduciary duties owed between shareholders in closely held companies.
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February 4, 2016
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The Texas Court of Appeals has dismissed a tort claim against a non-shareholder loan guarantor for lack of personal jurisdiction. In doing so, the court seemingly assumed that a cause of action exists for aiding and abetting shareholder oppression.
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September 8, 2015
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Conflicts of interest and issues related trusts used to hold interests of family enterprises were of particular interest at the recent Attorneys for Family Held Enterprises conference. This blog post discusses many of the engaging topics from the conference.
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August 10, 2015
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To what legal standard must a trustee adhere when he or she also participates in the control of a family or closely held business? Courts continue to grapple with this question. The high courts in both Georgia and Nebraska have recently provided their own analyses.
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June 22, 2015
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Recent high-profile shareholder rights cases show a trend of investors and hedge funds driving higher prices and gaining interest as a company's fair value is disputed. Gain insight from this shareholder rights blog that will help public and privately held companies be cautious in their valuations and actions when a shareholders assert their rights to dissent. Sensitivity to the stability of the underlying corporation, liquidity concerns, trust company considerations and responsibilities need to be considered.
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April 3, 2014
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As straightforward methods to market value come under heightened scrutiny, the market participant acquisition premium approach is increasingly being discussed as an alternative valuation measurement. The need for reliable valuation measurements and experienced shareholder counsel to forecast how the cadre of valuation methods can make an impact is paramount when disputes, litigation or buyout opportunities occur.
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December 4, 2013
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Rollins v. Rollins, a recent breach of trust and fiduciary duty case, addressed interesting issues at the appellate level regarding the dilemma that can ensue when two older family members are selected as trustees of a trust that holds interests in family owned enterprises. A settlor, also known as the person creating the trust, typically establishes a trust to hold interests in their business and frequently chooses trustees that are familiar with their business. The trustees oftentimes hold other interests in or positions within the business. The belief is that such individuals are in a position to understand the best interests of the business.
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November 1, 2013
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When family business disputes arise, court proceedings reveal which family members are vital to the business' success. To determine the fair value for the business, a key man discount can be considered to reflect that person's impact on the business. The Wisniewski case shows how one brother's departure from the business resulted in a loss in value until he was able to return to help in operating it.
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October 21, 2013
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Irrevocable life insurance trusts (ILITs) along with corporate governance strategies and reasonable expectation setting go a long way to lessen family business succession issues and potential shareholder oppression lawsuits. ILITs can be used to pay estate taxes, other major liabilities and create an effective means of income for family business shareholders. Shareholders rights attorneys can help family held enterprises explore this tool as a part of a business' succession planning.
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September 30, 2013
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Shareholder rights disputes oftentimes include date of value considerations that greatly affect a business' value. Family business cases uncover the conduct of each shareholder along with a court evaluation to determine fair value given the facts at hand. The Wisniewski case shows how the court varied its approach when family members' share of the business was being decided.
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September 23, 2013
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The Wisniewski case features many issues about how family business disputes occur and how to navigate complex litigation. From shareholder oppression to fair value concerns, the case's extraordinary circumstances are worth investigating.
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September 16, 2013
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Family businesses should consider what duties those who are in control owe to other family members involved in the company. This blog briefly discusses typical disputes, jurisdiction concerns and fiduciary duties to mitigate conflicts.
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September 9, 2013
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Trustees holding interests in family enterprises may have conflicting duties to the beneficiaries as well as unrelated shareholders and members of the business.
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September 4, 2013
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Appraisal proceedings and shareholder disputes that involve court ordered buyouts will value the interest to be purchased at its "fair value."  Fair value is a legal concept and generally different from the more familiar standard of value: fair market value. One of the primary differences is whether the determination and conclusion of value includes a discount for lack of a market for the interest.
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August 1, 2013
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In dissenters' rights matters or court ordered buy-out remedies, a court may conduct an appraisal to determine the value. It is critical to understand the standard of value the court will apply. In virtually all U.S. jurisdictions, the standard of value is called "fair value"...which is not necessarily "fair market value."
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July 29, 2013
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