Shareholder Disputes

Houston & Fort Worth Shareholder Disputes Lawyer

A Law Firm Dedicated to Positive Results

Most corporations in the state of Texas are known as companies that are “closely held.” A closely held corporation is one that has only a small number of shareholders. The shares they have are generally not traded publicly. In these types of businesses, the shareholders may be directly involved in making management decisions or playing an active role in the operation of the business.

In such companies, it is often the case that no one shareholder can hold a defined number of shares. But, if one of the shareholders holds half or more of the shares, it should not lead to a denial of rights to the those that own fewer shares. That would be what is referred to as “shareholder oppression.” Shareholder oppression happens when the majority of corporate shareholders engage in actions that unfairly affect the minority shareholders which can lead to shareholder disputes. At Keith Morris & Stacy Kelly, Attorneys at Law, we have two decades of experience in representing shareholders in such disputes in and around Houston and Fort Worth. As a trial attorney with extensive litigation skills, our lawyer can provide the assistance you need in navigating the legal issues involved in your dispute.

Shareholder Disputes

Shareholder disputes are often based on unfair, dishonest, or otherwise prejudicial mistreatment of minority shareholders. It commonly takes place in corporations that are not publicly traded, leaving the mistreated shareholders without any way to escape because they do not have the option of selling their stock and leaving the corporation.

Examples of mistreatment of shareholders, known as shareholder oppression, can include:

• Being denied dividends by the majority shareholders to which the minority are entitled.
• Being paid incorrect dividend amounts as a minority shareholder.
• A majority shareholder taking an unequal or unfair distribution of dividends.
• A majority shareholder taking a personal loan from corporate funds.
• Failure to assess the value of shares held by minority shareholders.
• A majority shareholder taking an improperly high salary.
• Majority shareholders working to take over the minority shareholder’s stock.
• Keeping minority shareholders out of the premises.
• Denying minority shareholders inspection rights to corporate books and records.
• And more.

Mistreatment or shareholder oppressive conduct of any kind can lead to shareholder disputes. Under Texas law, as a minority shareholder you have a fiduciary duty owed you by majority shareholders. You also have the right to be part of corporate meetings, to vote the shares, and to have access to and review of the corporate books. You have a right to benefit from your position, such as in the receiving of dividends as well as in selling shares to make a profit.

Texas law establishes that majority shareholders can be held accountable and made to exercise a duty of care to minority shareholders. This can be initiated through various legal actions, such as applying to the court for the appointment of a receiver. When a corporation is run by a receiver, that entity must be one that is independent and practices fair treatment to all parties.

Consult with Keith Morris & Stacy Kelly, Attorneys at Law

If you believe your rights have been violated through oppressive conduct by a majority shareholder, it is time to consult with a skilled and experienced litigation attorney. At our firm, we can discuss with you the details of your situation and strategize on how best to proceed. We can help you follow the proper procedures for resolving the situation whether it is through the forced purchase of your shares at a court-determined value or some other solution. Our firm has a long and successful history of handling civil litigation cases to the benefit of our clients.

Call us at (713) 636-5339 in Houston and (817) 442-2048 in Fort Worth or contact us online to get started today.