Shareholder Disputes

The relationship between shareholders can sometimes be analogized to a marriage. When the relationship breaks down and trust evaporates the minority shareholder(s) may be treated unfairly by the majority shareholder(s). Or one side simply wants out of the relationship. The situation becomes more complicated when the employer terminates the employment of an employee who is also a shareholder of the company.

The “oppression remedy” sections of both the Ontario and Canada Business Corporations Acts contain provisions to protect shareholders from actions of the company or other shareholders that are oppressive, unfairly prejudicial to or that unfairly disregards their interests, including a broad array of remedies to rectify the situation and compensate the shareholder.

In the employment termination situation there are often issues such as the date when shares must or may be purchased, the method of valuation of shares and whether the employee is able to obtain damages for any increased value of the shares during the reasonable period of notice.

The issues that arise in shareholder disputes are often complex and it is important to obtain legal advice to understand the issues, your rights and your options in these situations.