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Category Archives: Maryland Law update

Shareholders’ Right To Inspect Corporate Books and Records (Part 1)

October 6, 2015

We have covered several aspects of shareholder rights in our blogs, including the rights of minority shareholders in the context of oppression by the majority (available here and here) and, more recently, the right to bring a derivative action on behalf of a wholly owned subsidiary (available here). The fundamental principle underlying all these claims is that shareholders own the corporation. Thus, it is important for shareholders to have access to information regarding the business and management of the corporation in order to protect their interests as shareholders.… Read the rest

Maryland Law Update: Minority Shareholder Rights

September 5, 2015

Bontempo v. Lare.

In February 2000, Bontempo joined a company founded by the Lares, his former colleague and his wife, as a minority shareholder and employee.[1]  The arrangement was later formalized to a certain extent in the form of an attachment to the stockholders agreement, which, as it turned out, inadequately memorialized the parties’ understanding as to the terms of Bontempo’s employment and ownership.[2]  Over the years, the company grew and the relationship between the parties soured.  The Lares, on one hand, became dissatisfied with Bontempo’s commitment to the business and cut his salary; Bontempo, on the other hand, was concerned that the Lares were taking distributions as shareholders without notifying or providing him with his proportionate shares.… Read the rest

Maryland Law Update: Minority Shareholder Rights

August 29, 2015

In our previous blog posts on Ritchie v. Rupe,[1] available here and here, we discussed the rights of minority shareholders in a closely held corporation under Texas law.  We explained that, post-Rupe, in Texas, minority owners would have to show abuse of authority with the intent to harm the interests of one or more of the shareholders that creates a serious risk of harm to the corporation in order to show shareholder oppression.[2]  Moreover, a Texas minority shareholder who successfully proves oppression would no longer be entitled to a court-ordered buyout; instead, the sole remedy for oppression would be the appointment of a receiver.… Read the rest

All postings are intended to be planning tools to familiarize readers with some of the high-level issues discussed therein. No posting is intended to be a comprehensive discussion and additional details should be discussed with your transaction planners including attorneys, accountants, consultants, bankers and other business planners who can provide advice for your circumstances. This article should not be treated as legal advice to any person or entity.