We all need the occasional break. Working all day, every day for a business owner can seem like the only way to get ahead and serve your clients however if you never take a break you never refresh and replenish. July and August are often vacation months and this week while not taking a traditional vacation myself, I do want to…
Few people go into a business relationship thinking about when the partnership will fail. Partnership agreements can help ensure that the business does not fail (at least not due to internal fighting) as well as set a path towards amicable separation should disputes arise. Of course, not all business relationships end with litigation or acrimoniously. Many partnerships have only minor…
If you business relationship has found its way to litigation or is on its way to litigation, you have likely heard the term “derivative” claims. But what is a “derivative” claim? What is the difference between a “derivative” claim and a direct claim? Hopefully this post provides some insights to help distinguish the two types of claims for you. A…
We previously discussed what a Special Litigation Committee was and what the SLC does. The benefits on whether to appoint an SLC depends on which side of the derivative claim you find yourself. From the company’s perspective, the SLC can save the company significant time and expense in investigating the derivative claim before protracted litigation. From the disgruntled owner’s perspective,…
If your dispute with your partner has ended up in litigation, or maybe you have a friend or family member who has had a business dispute end up in litigation, you may have heard the term “SLC”. But what does that mean? SLC is an abbreviation for Special Litigation Committee. The SLC wields enormous power in the context of derivative…
Whether it be a small business owned with family, with friends, or with strict business partners, none of us go into business hoping for litigation. The Operating Agreement for a limited liability company (“LLC”) and the Bylaws for a corporation each respectively govern the internal relations amongst the business owners and with the business. The freedom to contract under the…
Often small business owners, especially when working with family or friends, seek to resolve business disputes without having to bring litigation. Avoiding litigation may be of paramount importance. While it is not always feasible to resolve such disputes short of litigation, in certain circumstances, there are tools to be able to amicably resolve intra business disputes without filing litigation. Having…
The reasons an owner dispute is triggered are never the same. Having handled several member and shareholder litigations, none of the disputes started the same way or involved the exact same circumstances. There are, however, some common themes that oftentimes lead to a dispute between owners. Usurpation of corporate opportunities, shareholders/members standing on both sides of a transaction, and breaches…
Most businesses in Minnesota are considered “closely held”. As it relates to a corporation, that means having 35 or fewer shareholders. Shareholders are the individuals that hold stock in the corporation – they are the owners. Being a shareholder in a closely held corporation has both pluses and minuses, just as being a shareholder in a publicly traded company does. …
A frequently asked question for closely held corporation shareholders is whether the shareholders owe each other any fiduciary duties? The answer is yes. In a closely held corporation, defined as a corporation with 35 or fewer shareholders, shareholders owe a duty to deal openly, honestly and fairly with other shareholders. If you are a controlling shareholder in a closely held…