Shareholder Disputes

Shareholder disputes may seem complex, but our team of lawyers at Forum Law are here to assist you. We are experienced in resolving all types of shareholder disputes and creating carefully-drafted shareholder agreements to avoid disputes in the first place.

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What is a Shareholder Dispute?

A shareholder dispute is a disagreement between shareholders and can arise with respect to the operational, procedural, or administrative aspects of a corporation. Shareholder disputes tend to be highly contentious and can have a significant impact on a corporation’s profitability, reputation, and overall success.

Common examples of shareholder disputes include:

Breach of contract, including a shareholder agreement
Breach of fiduciary duty
Business dissolution
Valuation of shares
Disagreement over management or operations
Fraud
Shareholder oppression

Shareholder Disputes Causes

Shareholder disputes can arise for a variety of different reasons, but some of the most common causes include:

Breach of the shareholder agreement – A breach of the shareholder agreement can have a significant impact on all the shareholders and the corporation itself. Examples of common breaches include selling shares contrary to the agreement, making decisions without the majority shareholders, or a shareholder attempting to terminate the agreement against the wishes of other shareholders. Failing to abide by contractual obligations tends to give rise to shareholder disputes.
Disagreements – Disagreements concerning the direction or operations of a corporation, such as terminating an employee, company spending, or moving the business and its operations, are often contentious and lead to shareholder disputes.
Fiduciary duties – Shareholders have many fiduciary responsibilities. At a minimum, majority shareholders must be honest and open with minority shareholders. Withholding crucial information or failing to act in the best interests of the corporation will lead to shareholder disputes.
Compensation or contribution – Disputes can arise over improper compensation or unfair contribution of shareholders. Particularly, when shareholders are employees and paid at disproportionate wages or when shareholders do not contribute a fair share to the corporation.
Disrespect of minority shareholders – Since minority shareholders have less of a role in the decision-making and management of the corporation, oftentimes they feel disrespected or unfairly prejudiced by the decisions of majority shareholders. If minority shareholders’ rights are not properly protected, shareholder disputes will arise.

Shareholder Remedies

Shareholders may be unaware of all the remedies at their disposal to cure any breaches and protect their rights. Our team of lawyers at Forum Law are experienced in all shareholder remedies. We have advocated zealously for court orders to correct or modify situations where there was an error or irregularity on behalf of the corporation. We have also advocated for general meetings, investigations, appraisals, dissolution or liquidation orders, and derivative and oppression actions. Contact one our experienced lawyers to find out what remedies are available and most suitable for your claim.

How to Resolve a Shareholder Dispute

When a shareholder dispute arises, there are many forms of resolution in Alberta, including:

Reviewing the shareholder agreement
Holding a general meeting
Appointing a third party mediator
Appointing additional directors
Arranging a buyout or force the sale of shares
Arranging for liquidation or dissolution of the corporation
Filing a lawsuit

The shareholder agreement will set out how a dispute should be resolved and the rights and responsibilities of the shareholders. Reviewing the shareholder agreement will be the first step in resolving a dispute, as it will outline the policies and procedures that the parties must follow. The shareholder agreement should include the process for buying and selling shares, appointing or removing directors and management, voting on shareholder resolutions, the dissolution of assets, and buyouts or forcing the sale of shares.

It may also be necessary to appoint a third party mediator or director to help resolve the dispute. A mediator is a neutral party that can assist shareholders come to a resolution by mutual agreement. Additionally, it may be in the best interests of the corporation to appoint an additional director to adduce a new perspective or avoid a deadlock.

Regardless of the method for resolving the dispute, our team of lawyers will assist you through the process. We will review the shareholder agreement, identify the legal issues, and advise you on all of your options. Our lawyers will negotiate and advocate zealously for the best resolutions for our clients. We will also ensure we resolve the dispute in the most efficient and cost-effective way.

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How Our Lawyers Can Help

Our lawyers can assist you with drafting shareholder agreements or resolving any shareholder disputes. We work closely with our clients to develop strategies and pursue remedies that reflect their business objectives and protect their interests. Our lawyers have decades of experience in negotiating successful outcomes for our clients. We utilize skilled negotiation techniques that best represent our client’s interests, while disrupting the business operations as little as possible. We also have great experience in all levels of court when settlement is not an option. No matter the type of shareholder dispute, one of our expert lawyers at Forum Law can assist you.

Services we provide

Civil Litigation also involves various statutory timelines that could have a significant impact on your ability to sue or defend a lawsuit. Do not wait to contact our team to determine if a civil litigator is right for you.

We represent both Plaintiffs and Defendants for the following services:

General litigation

Employment law, including wrongful dismissal, employment contracts, and severance packages

Construction and Real Estate Litigation, including Builder’s Liens

Corporate Litigation, including company disputes, director and shareholder rights, and “partnership” disputes

Foreclosures

Debt collection

Contract disputes

Common Types of Small Business Lawsuits

Breach of Contract
Disputes with employees
Intellectual Property Infringement
Product Liability

Breach of Contract
Disputes with employees
Intellectual Property Infringement
Product Liability

Civil lawsuits typically touch on issues involving breach of contract, commercial litigation, debt collection, property dispute, or perhaps a contractor who has not been paid for the work completed.

If you are served with a Statement of Claim or are contemplating filing a civil action, please make it a point to talk to Forum Law before you take any further action.

Steps in Civil Litigation

Preliminary

As a preliminary step, you may want to get the best advice on what kind of claim you can file in court or whether you even have a claim at all. After that preliminary advice, you may then be advised to file your complaint in court. The complaint in a civil process and the type of statements or counter statements that could be filed to explain your case are known in law as pleadings.

Discovery

This refers to the formal process the parties to a lawsuit go through to exchange documents about the witnesses and evidence they will present at the trial. This furnishes the parties with information about evidence the other side intends to rely on to prove their case in court. At this stage, depositions or sworn out of court oral testimonies may be needed. Forum Law can you navigate through this process.

Trial

The parties are required to present the facts of the case to the court. The rules of court stipulate what kind of evidence is acceptable. There are boundaries both parties cannot cross and when these boundaries are not adhered to, the evidence may be excluded by the court.

The Verdict

During civil cases sometimes tried with a jury, the jury ultimately determines who gets to win or lose and any resulting liability or damages. The jury in such instances determines the relevant facts and law before reaching a final verdict.

BUSINESS CIVIL LAW LITIGATORS

We are law litigators who have appeared in all three levels of Alberta courts: Provincial Court, Court of Queen’s Bench, and Court of Appeal. Our lawyers have nearly 60 years of courtroom experience between them and frequently appear before prominent Alberta judges.

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