The Relief You May Seek if You Are Suffering From Shareholder Oppression

Diagnosis Shareholder OppressionSo you’re suffering from shareholder oppression and you’re hoping relief is available; what relief may you seek in Iowa?  

Shareholder oppression may be difficult to “diagnose” (read more here), but once diagnosed and similar to any other ailment, the next logical question is, what relief is available?  Fortunately, for business owners suffering from shareholder oppression, Iowa’s courts have recognized several forms of relief that may be granted.  The following is a non-exclusive list of remedies that a court may fashion upon a finding that you have been oppressed as a shareholder:

  1. Dissolve the Iowa corporation (Iowa Code Section 490.1430);
  2. Appoint a receiver to wind up and liquidate the business (Iowa Code Section 490.1432);
  3. Appoint one or more custodians to manage the business and affairs of the corporation (Iowa Code Section 490.1432);
  4. Shareholders may elect, in lieu of dissolution, to purchase shares at fair value (Iowa Code Section 490.1434(1)-(3));
  5. The court may stay proceedings and order purchase of shares at fair value upon application of any party (Iowa Code Section 490.1432(4)-(5));
  6. The court may order payment of increased compensation to a plaintiff that he/she would have received had he/she not been denied promised employment (Holden v. Constr. Mach. Co., 202 N.W. 2d 348, 363-64 (Iowa 1972));
  7. The court may enter an order requiring majority shareholders to purchase minority shares at fair market value despite lower share value set by corporate bylaws (Maschmeier v. Southside Press, Ltd., 435 N.W. 2d 377, 382 (Iowa Ct. App. 1988)); and
  8. The court may enter an order requiring dissolution of the corporation at a specified future date, to become effective only in the event the stockholders fail to resolve their differences prior to the date (Baker v. Commercial Body Builders, Inc., 264 Or. 614, 507 P.2d 387,395-96 (1973)).

Notably, the Iowa Supreme Court recognized that “[i]n fashioning appropriate remedies, we have explained that trial courts should regard requests for general equitable relief with considerable liberality.”  Baur v. Baur Farms, Inc., 832 N.W.2d 663, 678 (Iowa 2013).  In other words, Iowa’s courts are given great discretion in fashioning appropriate relief to oppressed shareholders.  However, in fashioning such relief, courts must be “careful when determining relief to avoid giving the minority a foothold that is oppressive to the majority.”  Id.  

The foregoing demonstrates that if you are suffering from shareholder oppression and you are seeking relief for your unfortunate diagnosis, Iowa’s courts are equipped with the ability of prescribing several different forms of relief.  If you believe you are suffering from shareholder oppression and you have decided you need to seek a remedy or better understand your rights, you should consider an initial consultation with a corporate dispute attorney.

LEGAL DISCLAIMER AND TERMS OF USE

Innovative Litigation, L.L.C., as owner and host of this site, and Matthew McKinney as the author (acting on behalf of and through Innovative Litigation, L.L.C.) cannot and does not warrant the accuracy or reliability of the information presented on or through this site.  The law can and does change over time and the information contained herein may not reflect the most recent laws – whether statutory law, administrative law, case law, constitutional law, or otherwise.  The information on this website does not constitute legal advice and readers should not rely on it to solve problems or other matters.  Further, you should seek licensed counsel in the appropriate legal jurisdiction before taking any action.  Any information provided on this site is presented “As Is” for your personal curiosity and enjoyment.  It is not meant to be relied upon for legal advice, counsel, or for any other purposes.  Such information does not take the place of a lawyer.  Rules and laws differ by jurisdiction and the information contained within this website may not apply in your jurisdiction.  The appearance of articles, listings, or ads, by or for professionals, on this site, does not constitute an endorsement.  In all cases, you are responsible for determining the quality of services, information, and/or advice provided by professionals through, or as a consequence of, your use of this site.  Neither liability nor responsibility shall arise to any person or entity with respect to loss or damage caused (or alleged to be caused), directly or indirectly, by information posted on this website, or by reason of contact with a professional listed on, or posting information to, this site.  No attorney-client relationship is formed by viewing this website and practice is limited to jurisdiction where lawyers are admitted.  The information furnished on the website is only general and not a substitute for personalized legal advice.   Legal advice cannot be given without full consideration of all relevant information relating to the individual(s) situation.  Laws can change daily and new laws may, and likely will, affect the accuracy of the information herein.  The information herein may be outdated and replaced by new law.

If you are seeking representation, please read the following notice before sending an e-mail:

Sending an e-mail will not make you a client.  Until an agreement regarding representation is reached with you, anything you send will not be confidential or privileged.  Before representation can occur, a lawyer will first take you through the conflict of interest procedure and see that you are put in touch with the lawyer best suited to handle your matter.

If you proceed with an e-mail, you confirm that you have read and understood this notice.

Advertisements

About Matthew McKinney

Attorney focused on civil and commercial litigation.
This entry was posted in Business Owner, Director, Intra-corporate dispute, Litigation, Manager, Member, Shareholder and tagged , , , , , , , , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s