Shareholder Disputes

What are shareholder disputes?  

Shareholder disputes in Florida occur when there is a disagreement or conflict between two or more company shareholders. These disputes can arise due to various reasons, such as disagreements over management decisions, breach of fiduciary duties, breach of shareholder agreements, or even disputes over the valuation of the company.  

Need help with a potential shareholder dispute? Schedule your consultation today with a top business litigation attorney.  

What are common shareholder disputes that lead to litigation? 

• Breach of fiduciary duty: Shareholders owe a fiduciary duty to the company and other shareholders to act in the company’s best interest. If a shareholder breaches this duty by engaging in self-dealing or misusing company assets, other shareholders may bring a claim against them. 
• Oppression: Shareholders may bring a claim for oppression if they believe that the majority shareholders’ actions are unfairly prejudicing their interests. 
• Shareholder agreement disputes: Shareholders may have entered into a shareholder agreement that outlines the rights and obligations of each shareholder. A dispute may arise if there is a disagreement over the interpretation or enforcement of the agreement. 
• Valuation disputes: Shareholders may disagree over the value of the company or the value of their shares, which can be particularly contentious in cases where one shareholder wants to buy out another. 
• Corporate governance: Shareholder disputes can also involve disagreements over corporate governance, such as the election of directors or the adoption of bylaws. 
• Dissolution: In some cases, a shareholder dispute may lead to the dissolution of the company. Dissolving a company can be a complex process that involves a range of legal issues, such as the distribution of assets and the settlement of outstanding debts. 

What are relevant laws related to shareholder disputes in Florida? 

The Florida Business Corporation Act governs shareholder disputes. Some of the relevant statutes include: 

• Fla. Stat. § 607.0822 outlines the notice requirements when communicating with shareholders. A shareholder dispute may arise if a corporation doesn’t comply with the requirements. 
• Fla. Stat. § 607.0206 outlines the bylaw requirements. The contents of the bylaws could indirectly lead to shareholder disputes. 
• Fla. Stat. § 607.1301 outlines shareholders’ appraisal rights available in certain transactions. Shareholder disputes can involve disagreements about prices for shares. 
• Fla. Stat. § 607.0750 outlines the requirements for direct legal action by a shareholder against another shareholder, an officer, a director, or the company. 
• Fla. Stat. § 607.0804 details the election of directors, which can sometimes lead to shareholder disputes if contested. 

What is required to prove a shareholder dispute in Florida? 

The elements required to bring a shareholder claim will depend on the allegations. However, general elements required for most lawsuits about shareholder disputes include the following: 

• Standing: The plaintiff must have standing to bring the claim. To have standing, the plaintiff must be a shareholder of the corporation in question, and they must have suffered an injury or harm as a result of the actions of the defendant. 
• Causation: The plaintiff must show that the defendant’s breach of duty caused the plaintiff harm. The plaintiff must demonstrate a causal link between the defendant’s actions or omissions and the plaintiff’s alleged damages. 

When a set of facts is appropriate to meet the requirements of negligent security, there are many paths a claimant may take. We are value-based attorneys at Jimerson Birr, which means we look at each action with our clients from the point of view of costs and benefits while reducing liability. Then, based on our client’s objectives, we chart a path forward to seek appropriate remedies, such as:  

• Monetary damages; 
• Injunctive relief; 
• Removal of corporate officers or directors; or 
• Dissolution or sale of the company 

To see what actions may be available for your unique situation, please contact our office to set up your initial consultation. 

What are common defenses to shareholder disputes in Florida? 

• Lack of standing: The defendant may argue that the plaintiff shareholder does not have standing to bring the claim, such as if the plaintiff does not own enough shares to have standing or has not followed the proper procedures for bringing a claim. 
• Business judgment rule: The business judgment rule is a legal principle that generally holds that corporate directors and officers are entitled to make business decisions without interference from the courts if they act in good faith and the corporation’s best interests. The defendant may argue that their actions were in accordance with the business judgment rule and, therefore, not subject to legal challenge. 
• Statute of limitations: Shareholder claims are subject to a statute of limitations, limiting the amount of time a plaintiff has to bring a claim. Depending on the type of dispute, the defendant may argue that the plaintiff’s claim is time-barred because the plaintiff did not file the claim within the applicable statute of limitations. 
• Lack of evidence: The defendant may argue that the plaintiff has not provided sufficient evidence to support their claims. Examples may include arguments that the plaintiff has not shown that the defendant breached their duties or that the evidence does not support the plaintiff’s damages. 

To see what defenses may be available for your unique situation, please contact our office to set up your initial consultation. 

Have more questions about a shareholder disputes-related situation?  

Crucially, this overview of shareholder disputes does not begin to cover all the laws implicated by this issue or the factors that may compel the application of such laws. Every case is unique, and the laws can produce different outcomes depending on the individual circumstances. 

Jimerson Birr attorneys guide our clients to help make informed decisions while ensuring their rights are respected and protected. Our lawyers are highly trained and experienced in the nuances of the law, so they can accurately interpret statutes and case law and holistically prepare individuals or companies for their legal endeavors. Through this intense personal investment and advocacy, our lawyers will help resolve the issue’s complicated legal problems efficiently and effectively. 

Having a Jimerson Birr attorney on your side means securing a team of seasoned, multi-dimensional, cross-functional legal professionals. Whether it is a transaction, an operational issue, a regulatory challenge, or a contested legal predicament that may require court intervention, we remain a tireless advocate every step of the way. Being a value-added law firm means putting the client at the forefront of everything we do. We use our experience to help our clients navigate even the most complex problems and come out the other side triumphant. 

If you want to understand your case, the merits of your claim or defense, potential monetary awards, or the amount of exposure you face, you should speak with a qualified Jimerson Birr lawyer. Our experienced team of attorneys is here to help. Call Jimerson Birr at (904) 389-0050 or use the contact form to set up a consultation.