3.4.7 Summary of the oppression remedy

The analyses made in previous sections show that when traditional protective mechanisms are not adequate in a close corporation, the oppression remedy fills the gap. This remedy equips the dissatisfied or aggrieved shareholders with a strong weapon through the broad interpretation of oppressive conduct as well as alternative forms of relief.1

Although corporate statutes have not given any clue to the defmition of oppression, courts have developed it through cases.2 We can see that the defeat of reasonable expectations has become dominant in states that have the oppression remedy, and jurisdictions without the statutory oppression remedy accept this standard too. The defeat of reasonable expectations is cited as "the most important development in the closely held corporation field over the last 20 years."3 This standard offers the minority more protection in that no business purpose and no satisfaction of 'essential inference of imminent disaster" are required.4 Besides, compared with the fiduciary duty standard in which many unsettled and complicated issues exist, the reasonable expectations standard is simpler to use. It is nowadays considered the best guide in defining oppression, and is being used increasingly by courts.

A related significant development in the oppression remedy is the advent of alternative remedies. All progress, such as stronger protection, enhanced interpretation of oppression and the willingness of the court to intervene, could not have thrived without the contributions of alternative relief. The less serious the relief, the broader the interpretation of oppressive conduct, and the more willingly the court will grant relief.

Owing to the predominance of buyout as relief, the valuation issue is thus of paramount importance in determining the effectiveness of this remedy. The principles and methods adopted in the appraisal remedy have an instructive function in this remedy.