What is minority shareholder litigation?

Minneapolis attorney Scott Benson of Briol & Associates defines minority shareholder litigation.

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Minority shareholder litigation is probably, basically, about what it sounds like. It’s litigation between shareholders of a closely held company. And a closely held company is a private company, one that’s not publicly traded, usually has 15 or fewer shareholders, and oftentimes will be family owned. So, in those cases, there are often disputes regarding where the company is going to go in the future. It could be a dispute concerning a merger, potential merge of the company or whether or not they should go in that direction. It could be a dispute concerning whether or not the majority shareholder is oppressing the minority shareholder. Or there could actually be some wrongdoing on behalf of the majority shareholder that the minority shareholder would like to pursue. Or, sometimes, there’s issues concerning whether or not the company should take one direction and invest its proceeds in moving that way or whether there should be a distribution of assets. So virtually any circumstance you can imagine in a small company could lead to shareholder litigation.