Corporate disputes involving a corporation, its shareholders, partners, and other corporate stakeholders are a more frequent part of business than many would like to admit. However, these disputes are indicative of various issues within a business and should be resolved in an effort to improve the business for all involved. Unfortunately, all too often, disputes persist despite negative effects on all parties involved – sometimes because stakeholders do not wish to risk offending others or because one or more parties are unsure how to proceed with litigation and resolution.
If you are experiencing a corporate dispute that is preventing you from achieving your business objectives, you need a qualified shareholder and corporate dispute litigation attorney to help you resolve the issue effectively. As an Orange County business litigation firm, Blake & Ayaz has extensive experience regarding shareholder and corporate disputes while protecting our clients’ most valuable time and resources. Our attorneys can provide the guidance and litigation savvy necessary to protect your interests and achieve your business objectives while reducing conflict with other stakeholders.
In California, the term “shareholder dispute” generally refers to some type of disagreement among a group of shareholders (those who own one or more shares of stock in a corporation), or between two shareholders, regarding the way the corporation is handled. Alternatively, the disagreement could exist between members of an LLC or even between partners in a partnership. Such disputes may be regarding the way the corporation is run, its operations, finances, or something else.
Our Orange County business and corporate dispute attorneys can resolve disagreements or litigate disputes regarding a number of circumstances, including:
Any dispute between shareholders, partners, corporate officers, or a combination of these individuals puts a business at risk and interrupts healthy operations for all involved. Worse, if the dispute is allowed to progress, future operations of the company can be hampered to the point that damage may be irreversible. For that reason, any and all corporate and shareholder disputes should be resolved as efficiently as possible.
In many cases, we firmly believe that an efficient, effective resolution is best achieved via a professional dialogue between all parties involved. Such a dialogue often takes the form of attorney negotiation, mediation, or direct arbitration, depending on the circumstances of the dispute. As a result, many cases need not reach the litigation stage.
At other times, the attorneys at Blake & Ayaz may be able to leverage the tools of litigation – including interrogatories, depositions, production of documents, and more – to highlight issues and advance your interests without actually proceeding to trial. However, sometimes, a suitable negotiation agreement remains out of reach without partnership litigation or derivative actions to ensure shareholders receive compensation for damages received due to the misconduct of others. Our experienced litigators remain well-prepared with a customized tactical plan designed to achieve the best possible resolution from your derivative action or other dispute litigation.
According to California law, any corporate director, corporate officer, or group of majority shareholders holds a specific responsibility to the company and must protect its interests – and, by extension, the interests of all shareholders involved. This responsibility is known as fiduciary duty and binds the individuals listed above to act in the company’s best interest. When an individual or group of majority shareholders breaches this duty – by committing illegal acts, breaching an understanding of good faith, committing fraud, or otherwise harming the company to further one’s own interests – minority shareholders can file a derivative action.
Derivative actions allow one or more shareholders to file a claim against the majority shareholders or corporate officers in breach of duty, for committing illegal acts or otherwise failing to protect the interests of the company. Such actions result in a damages claim belonging to the company, and any recovered damages are distributed to all shareholders in the name of the company. Derivative actions are a common form of dispute litigation. The business litigation attorneys at Blake & Ayaz are well-versed in pursuing derivative action litigation that achieves a satisfactory solution for our clients.
Whether a dispute exists among shareholders, between partners, members of an LLC, or between a group of minority shareholders and a board, resolving the issue expeditiously benefits all involved. Seeking a resolution via Orange County attorney negotiations or dispute litigation will help you protect your interests and potentially recover any damages you have experienced as a result of corporate misconduct or conflicts of interest. At Blake & Ayaz, our experienced attorneys can guide you through all stages of dispute negotiation and litigation and return your business to its normal operations.
For more information about shareholder and corporate disputes in Orange County or to request a free consultation, contact Blake & Ayaz today.
A: While specific duties are often outlined in company documents or a director’s contract, a director or officer typically owes a duty of care, duty of loyalty, duty to avoid the waste of corporate assets and further the company’s interests, and a duty to avoid conflicts of interest.
A: While it is essential to take action if you believe a majority stakeholder, director, board, or other entity acted inappropriately, your options can vary based on the action and other specifics. For more information, contact an experienced dispute litigation attorney.
A: In general, you can request the board take action against the individuals in question or pursue a derivative action in the company’s name.
A: First, your attorney must prove that the breach of duty directly caused damages. Then, damages for loss of profit, penalties for profit gained by the officer, and/or damages resulting from losses experienced due to negligence or carelessness can be recovered.