Exit remedies for minority shareholders in close companies (IVOR nr. 82) 2011/3.4.3.1:3.4.3.1 "Oppressive" and "illegal or fraudulent" actions

Exit remedies for minority shareholders in close companies (IVOR nr. 82) 2011/3.4.3.1

3.4.3.1 "Oppressive" and "illegal or fraudulent" actions

Documentgegevens:

dr. Q. Wang, datum 02-05-2011

Datum: 02-05-2011
Auteur: dr. Q. Wang
JCDI: JCDI:ADS405267:1
Vakgebied(en): Ondernemingsrecht (V)

According to Article 14.30 of the RMBCA, "the court may dissolve a corporation in a proceeding by a shareholder if it is established that: ... (ii) The directors or those in control of the corporation have acted, are acting, or will act in a manner that is illegal, oppressive, or fraudulent." The wording "illegal" or "fraudulent" is familiar to the court, unfortunately not the term "oppressive", which empirically seems to be the most fruitful avenue for minority shareholders to pursue relief onder this statutory dissolution article.1 Courts have observed that oppressive conduct is different from illegal or fraudulent conduct.2

Toon alle voetnoten

Voetnoten

Voetnoten

Charles W. Murdock, op cit., p. 20.

White v. Perkins, 213 Va. 129, 189 S.E.2d 315 Va. 1972. (Citing Central Standard Life Ins. Co. v. Davis, 10 I11.2d 566, 572, 141 N.E.2d 45, 59, 1957; Gidwitz v. Lanzit Corrugated Box Co., 20 I11.2d 208, 215, 170 N.E.2d 131, 135, 1960) (The word (oppressive) does not necessarily savour of fraud....ft is not synonymous with 'illegal' and 'fraudulent'); and see also 433 N.Y. S. 2d 359, 361 (sup. Ct. 1980).