Corporate Freeze-Outs And Shareholder Squeeze-Out Litigation In Missouri
At Carter Law Offices, we represent small- to mid-market business owners, corporate partners and minority shareholders across the Kansas City metro who are facing a breakdown in a critical commercial relationship.
Our attorneys bring a combined 45 years of collective legal experience to complex corporate litigation, offering you a cost-effective, pragmatic approach to resolving the issue out of court while providing the formidable, big-firm firepower needed if the case goes to trial.
What Is A Shareholder Squeeze-Out?
When a critical commercial relationship breaks down, the resulting dispute can threaten your revenue, your corporate control and your personal equity. A shareholder squeeze-out (or freeze-out) occurs when majority owners abuse their power to unlawfully force minority investors out of the company or severely diminish the value of their shares.
At Carter Law Offices, we know the profound betrayal you feel when trusted partners attempt to strip you of your hard-earned business. Founded in 1995, our firm leverages decades of collective legal experience to protect minority shareholder interests.
As a principled shareholder oppression law firm, we provide the big-firm firepower and deep-rooted moral values necessary to protect your rights, ensuring you are never treated like just a case number.
Common Tactics Used In Corporate Squeeze-Outs
When executives or hostile partners attempt to push you out of a business with a low-ball buyout, they will use a set of predictable tactics to try to force your hand:
- Firing you from the company: Majority partners may attempt to cut off your income by terminating your employment, but doing so often violates Missouri’s legal protections against shareholder oppression.
- Stoppage of dividends: Majority partners may suddenly decide to stop paying dividends and/or distributions from company income while paying themselves and their allies fat salaries and bonuses, and making large capital investments with retained cash.
- Exclusion of information: The partners controlling the majority may attempt to cut you off from access to corporate records and information, board minutes and your login to company software and financial records.
- Illegally issuing shares to dilute ownership: Majority owners can make claims of new investment in the company, but they will often attempt to illegally issue additional shares to themselves or to newly established “dummy” partners, thereby devaluing your existing shares.
Each one of these hostile and abusive practices can be financially disastrous, as well as emotionally devastating. What you need is a cost-effective, assertive legal plan of action that will halt this corporate abuse, protect your rightful position within the company and return the property you own in the business to you without destroying the enterprise’s operations.
Fiduciary Duties And Corporate Oppression
When controlling members of the company take advantage of minority owners through hostile action, it often constitutes a breach of their strict Fiduciary Duty. We will thoroughly review the corporate bylaws, operating agreement, financial transactions and all company practices and communications to establish how the controlling members of the business have violated their legal and ethical responsibilities to minority owners.
Once we have clearly established these violations, we take a firm stance with our opposing counterparts.
Our legal team knows how to play hardball in court and make opposing counsel aware that we are willing to try our cases before a judge. We strategically target their financial vulnerabilities, and if an out-of-court solution cannot be obtained, we fight tirelessly for our clients at trial to obtain the most favorable result.
How Minority Shareholders Are Protected
We are here to fight for you and the value of your corporate equity. When you have been targeted with hostile, corporate “freeze-out” tactics, we are the right team to help protect you. We will fiercely protect your interests through a series of powerful and effective legal actions designed to restore fairness and provide for your future, including:
- Enforce your right to inspect books and records: We pursue compliance with our client’s right to obtain all pertinent financial documents to identify assets, undisclosed liabilities, and management pay or benefit increases, or unauthorized pay increases, to managing partners. We generally find the principal evidence of breach of fiduciary duty and oppression of shareholders.
- We fight for an equitable buyout: In cases where repair is not possible, we pursue litigation under Missouri law to obtain a court order mandating a buyout of your shares at fair market value.
- We initiate breach of fiduciary duty lawsuits: We initiate direct or derivative lawsuits to hold controlling entities accountable, facing Missouri’s strict standing requirements to ensure proper recovery.
- We seek judicial dissolution of the company: In cases where control has been irrevocably lost, and there is no reasonable prospect of resolution, we may ask a judge to dissolve the company and order the equitable distribution of its assets.
Each member of Carter Law Offices is committed to obtaining positive outcomes for the people and businesses we represent. We exist to make a real difference in the lives of those we represent.
Contact Carter Law Offices Today
We offer free initial consultations to individuals and businesses in Kansas City and the surrounding areas to review their cases, explain the legal process and outline potential strategies.
You cannot afford to let your business partners drive you out of the enterprise you helped build, nor can you afford to risk financial ruin due to their abusive actions. Contact Carter Law Offices today at 816-283-3500 or use the online form to set up an appointment. Let our elite team of trial lawyers defend your corporate equity strategically.