Business Law Monographs, Volume C9--Avoiding and Resolving Disputes With Minority Shareholders

Assists corporate counsel in advising management on methods of avoiding, resolving, or containing problems with minority shareholders. Includes fiduciary duty to minority shareholders, the right of minority shareholders to participate in management, and contractual methods of preventing or resolving disputes with minority shareholders.
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ISBN: 9780820524146
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Assists corporate counsel in advising management on methods of avoiding, resolving, or containing problems with minority shareholders. Includes fiduciary duty to minority shareholders, the right of minority shareholders to participate in management, and contractual methods of preventing or resolving disputes with minority shareholders.

Business Law Monographs, Avoiding and Resolving Disputes With Minority Shareholders, assists corporate counsel in advising management on methods of avoiding, resolving, or containing problems with minority shareholders.

Chapter 1 describes the fiduciary duty owed by management and majority shareholders to minority shareholders. The chapter describes how the general legal standards have been applied in cases involving freeze-outs and negotiated stock purchases, and how a management engaging in such transactions can establish a record demonstrating compliance with these legal standards.

Chapter 2 helps counsel analyze the potential for disruptive minority action under a given corporation's charter, bylaws, and governing statute, and describes the advantages and drawbacks of the various legal methods of precluding minority shareholder problems. The chapter gives a significant amount of attention to compliance with the federal and state disclosure requirements that arise when the action to be taken entails a shareholder vote.

Chapter 3 is concerned with contractual dispute resolution. The chapter describes the function and drafting of shareholders agreements, which typically are written to set ground rules to avert future disputes. Attention is given to the negotiation of the common features of such agreements: voting arrangements, restrictions on stock transfer, and restrictions on stock issuance. The chapter then discusses standstill agreements, which typically are negotiated to neutralize an existing threat to the control of a publicly held corporation. The typical elements of such agreements- limits on minority stock ownership and restrictions on transfer-are described in separate subsections.

Chapter 4 deals with corporate and majority shareholder actions intended to reduce the ownership position of dissident minority shareholders. The categories of transactions addressed in this chapter include corporate stock repurchases, majority shareholder purchases, recapitalizations, reverse stock splits, and cash out mergers. The chapter heavily emphasizes federal securities law requirements as they affect each category.

Whether you are counsel reviewing your company's policies to ensure compliance with applicable laws and regulations or you are trying to avoid future problems, Business Law Monographs, Avoiding and Resolving Disputes With Minority Shareholders, will help you comprehend the basic law regarding the myriad legal issues revolving around minority shareholders.

Also available as part of the complete 38-volume set entitled Business Law Monographs.

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Table of contents

Division I TEXT 


CHAPTER 1 The Fiduciary Duty Owed by Corporate Officers, Directors and Majority Shareholders to Minority Shareholders

CHAPTER 2 Assessing the Rights and Powers of Minority Shareholders to Participate in the Management of the Corporation

CHAPTER 3 Contractual Methods of Preventing or Resolving Disputes With Minority Shareholders

CHAPTER 4 Actions by the Corporation or Majority Shareholders to Neutralize or Eliminate Dissident Minority Shareholders

Division II FORMS


Form C9-1 Sample Proxy Materials Discussing a Proposed Charter Amendment Eliminating Cumulative Voting Rights


Form C9-2 Sample Charter Expressly Denying Cumulative Voting Rights


Form C9-3 Sample Engagement Letter Retaining a Proxy Solicitation Firm


Form C9-4 Sample Bylaw Provision Authorizing the Establishment of Board Committees


Form C9-5 Sample Bylaw Provision Setting Forth Nomination and Business Procedures
Form C9-6 Sample Reincorporation Merger Agreement


Form C9-7 Sample Standstill Agreement


Form C9-8 Sample Standstill Agreement II


Form C9-9 Sample Standstill Agreement III


Form C9-10 Sample Form of Financial Advisers' Fairness Opinion to Special Committee


Form C9-11 Sample Charter Provisions Effecting a Recapitalization


Form C9-12 Sample Form of Agreement and Plan of Merger for a Cash Out Merger

Division III SOURCE MATERIALS


Item C9-i1 State Law Chart I: Statutory Provisions Regarding Cumulative Voting


Item C9-i2 State Law Chart II: Shareholder Super-Majority Requirements Imposed by Statute


Item C9-i3 State Law Chart III: States Permitting Shareholder Action by Consent Without Unanimous Consent


Item C9-i4 State Law Chart IV: Shareholder Preemptive Rights Provisions


Item C9-i5 State Law Chart V: Statutes Granting Shareholders the Right to Call Special Meetings


Item C9-i6 State Law Chart VI: Statutory Provisions Regarding Removal of Directors Without Cause