When conflict within a privately owned company cannot be resolved through negotiation and the parties stand at the brink of filing litigation to resolve their disputes, the parties must analyze whether their claims are direct or derivative in nature.The distinction between direct and derivative claims and claim procedures may trap the unwary. 1. DEFINITIONS. Direct …
Dissenters’ rights is a little known and little used statutory procedure that can be invoked under particular circumstances which may solve disputed issues in a business divorce.The basic concept of dissenters’ rights is to allow a shareholder to be bought out at fair value when a substantial change in corporate structure is about to take …
This series of articles continues to now examine unique statutory claims that may exist when a business divorce cannot be avoided and the squeeze out actions reviewed in the last article leads to possible legal actions.Claims exist under the Arizona Corporation Code and arise from common law duties.Claims arising out of the Corporation Code are …
In my last article I reviewed how directors, officers and employees may receive an advancement of their attorney fees prior to judgment when they are brought in to a proceeding based on actions taken in their official capacities for the company.However, the ultimate authority to indemnify, allowing the person to keep their advancement and further …
When business owners are in conflict, they must be aware of their fiduciary duty obligations to the company and the other owners.As conflict builds, an owner’s management is more critically reviewed, decisions questioned, and unpopular results criticized.Many business decisions are protected by the Business Judgment Rule.It is important for business owners to know and distinguish …