Abstract
Because the owners of closely held corporations do not have a ready market in which to sell their shares should they disagree with the corporation’s management, case law and statutes have evolved to offer special protections in the areas of control and abuse of control of closely held corporations.
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Notes
- 1.
N.B.: when determining whether the purchase of shares at fair market value would be an appropriate remedy for a breach of fiduciary duties in a closely held corporation, a court will first look to the agreement and to state law. It will only use its equity powers if it concludes that justice requires some remedy not provided for in the agreement or state law.
- 2.
See, e.g., Austin v. Consolidated Edison Company of New York, Inc. (S.D.N.Y. 1992) (ruling in favor of the defendant corporation when it met its burden of showing that the plaintiff’s proposal involved ordinary business operations).
- 3.
N.B.: if the plaintiff had not stated outright in his deposition that he was interested only in communicating his political views, or if he characterized his interest as being based on a moral issue, he may have achieved the same positive result as the plaintiff in Lovenheim v. Iroquois Brands (D.D.C. 1996), who was able to make a proposal that was based on a socially important—yet economically insignificant—issue.
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© 2013 Springer-Verlag Berlin Heidelberg
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Balouziyeh, J.M.B. (2013). Problems of Control. In: A Legal Guide to United States Business Organizations. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-37907-9_9
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DOI: https://doi.org/10.1007/978-3-642-37907-9_9
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