NJ Shareholder Partnerships Disputes Lawyer

Attorneys Assisting Clients in New Jersey

Owning an interest in a company can be financially fruitful, but as with many ventures, it is not without risk. For example, parties may disagree about a corporation’s future or other important decisions that may affect them financially. Similarly, partners may not always see eye to eye regarding their obligations, company operations, or how a business should be valued or divided. If people are embroiled in shareholder and partnership disputes, their rights may be in jeopardy. An attorney should be consulted as soon as possible.

Shareholder Disputes

In many companies, there are majority and minority shareholders. While all shareholders typically have a say when it comes to making important decisions regarding the company, majority shareholders usually dictate the direction the company takes. Thus, shareholder disagreements can arise when minority shareholders are dissatisfied with the majority shareholders’ management of a company. In many instances, despite their dissatisfaction, minority shareholders are left with no recourse, and they often have difficulty finding buyers willing to purchase their shares, leaving them effectively oppressed. New Jersey law protects oppressed minority shareholders, however, and under certain circumstances, they can take legal action to seek relief from shareholder disputes.

Specifically, the law states that a plaintiff can file a lawsuit asking the court to take measures such as ordering the sale of stock or dissolving a corporation if the plaintiff can prove that there is a division in voting power that is so deep the shareholders have failed to elect directors for at least two years, or that the directors or management of the corporation cannot take action on one or more important matters. A plaintiff can also ask the court to take action in cases in which the directors of a corporation with twenty-five or fewer shareholders have acted illegally or fraudulently, abused their authority, mismanaged the corporation, or otherwise oppressed the minority shareholders. The court may also order the sale of a corporation’s stock shares for their fair value on the date the action was instituted or another date the court deems equitable.

Dealing with Partnership Disputes

Partnership disputes typically arise due to disagreements over each partner’s rights and duties, how and when a partner can transfer his or her ownership rights in the company, and what happens to shares when a partner dies. Conflicts may also arise if one party engages in fraudulent behavior or breaches the fiduciary duties of loyalty and care. In such instances, a partner may seek resolution by filing a civil lawsuit related to a partnership dispute. New Jersey law specifically provides that a partnership can bring an action against a partner for breaching the terms of the partnership agreement or for violating a duty that he or she owed to the partnership, thereby causing the partnership to suffer harm. Similarly, the law provides that an aggrieved partner can bring an action against another partner or the partnership, asking the court to enforce the partner’s rights or to dissolve the partnership.