Philadelphia, PA commercial litigation attorney Stanley Cheiken talks about a minority squeeze out case he handled. He shared that he has handled numerous minority squeeze-out cases across Pennsylvania, New Jersey, and in both state and federal courts. In such matters, the central issue typically arises when a majority or senior owner uses his control of a business to deprive a minority owner of the benefits to which he is entitled.

One notable case involved a junior owner who had invested significant time and effort into managing the business, only to have the majority owner attempt to strip him of the rights and financial benefits he had earned. Majority owners may pursue various tactics in these situations, but the underlying conduct generally amounts to unfair treatment and the misuse of majority control to deny the minority the fruits of his bargain.

The law provides remedies in these circumstances. In the case at hand, he presented to the jury approximately half a dozen examples of how the majority owner had acted in bad faith to enrich himself at the minority owner’s expense. Despite the case’s complexity, a suburban jury in Philadelphia returned a verdict in favor of the minority owner. The decision not only awarded damages for lost earnings but also compelled the majority owner to purchase the minority owner’s interest at fair value.