3.4.1.3 The introduction of altematives to dissolution and a broader definition of "oppression"

Between the late 1970s and 1980s, a great many states, under the infiuence of the company law development in the UK,1 revised their traditional views and introduced altematives to dissolution 2 When section 210 of the UK Company Act was revised in 1980, the link between oppressive conduct and winding—up was expressly removed, and thus courts could grant alternative relief for oppressive conduct as they deemed appropriate, such as a court ordered buyout and appointment of a provisional director or a custodian.3 The requirement that the conduct must have been serious enough to justify a winding-up did not have to be satisfied for these forms of relief to be applied.4 Now, as in the UK, altemative relief in the US is much more frequently granted than a judicial dissolution order, which helps to enhance the availability of this remedy. In states where there is no stipulation of statutory alternatives, courts exercise their inherent equity power to create alternatives, and by doing so, relief, such as buy out, or appointment of a provisional director, is also readily available to minority shareholders.5 With the availability of less drastic forms of relief, courts also tend to give a broader interpretation to oppressive conduct,6 and such willingness is demonstrated by the recent interpretation standard: "defeat of reasonable expectations" of minority shareholders.7

In sum, botte the interpretation and relief of the oppression remedy do not remain statie; they have evolved along with cases and ever improving understanding of the nature of close corporations. The following part of this chapter first attempts to identify the rationale of this remedy and then explores the interpretation of oppressive conduct. There is still no clear-cut scope, but two standards are summarized from case law, i.e., breach of enhanced fiduciary duties and frustration of minority shareholders' reasonable expectations. Finally, attention is also paid to the relationship and distinctions between the oppression remedy and the appraisal remedy.