This blog, written by Thomas E. Rutledge, focuses primarily on business entity law in Kentucky. Postings on contract law, contractual and statutory construction, and the entity law of other jurisdictions appear as well. There may as well be some random discussions of classical, medieval and renaissance history.
Thursday, September 25, 2014
Minority Shareholder Oppression? – The Problem is Not with the Answer but Rather with the Question
Minority Shareholder Oppression? – The Problem is Not with
the Answer but Rather with the Question
recent issue of the Journal of Passthrough Entities, I published Minority Shareholder Oppression? – The Problem
is Not with the Answer but Rather with the Question.
this article, I submit that the classic formula under which the “oppression” of
minority shareholders (and members of LLCs) is framed is an instance of a
failure to critically consider the question before proceeding to ascertain the
answer.Rather, these cases are often
simply an effort to, ex ante, rewrite the corporate agreement that is embodied
in the statute and the organizational documents for the benefit of someone who
failed to negotiate particularized protection for themselves at the inception
of the venture?
I suggest that claims of “oppression” should typically be rejected applying
relatively straight forward principals of contract law.