A lawsuit tells the plaintiff’s version of the story, not necessarily what happened. Few things are more frustrating for a business owner than reading a complaint filled with allegations they believe are inaccurate, misleading, or false. The immediate reaction may be to call the plaintiff, send an angry email, contact employees to explain what “really […]
Shareholder Litigation
What Happens If Your Business Ignores a Lawsuit?
Ignoring a business lawsuit does not make it go away, and the other side may obtain a judgment without ever proving its case at trial. When a business receives a summons and complaint, doing nothing can be one of the most consequential responses. The allegations may seem meritless. The amount demanded may appear exaggerated. An […]
Your Business Received a Lawsuit. What Happens Next?
Being served with a lawsuit starts the clock, and what your business does next can affect the entire case. Receiving a summons and complaint can disrupt any business. The papers may arrive at the office, be delivered to a registered agent, or reach an owner or executive with little warning. The allegations may be surprising, […]
Can a Board Director or Shareholder Make a Deal with Their Own Company?
When the people approving a corporate transaction also stand to benefit from it, the transaction may deserve closer scrutiny. Companies regularly enter into transactions with vendors, landlords, lenders, consultants, and other businesses. But what happens when the person benefiting from the deal is also a director, officer, or controlling shareholder of the company? A director […]
Can a Corporate Officer Be Sued for Putting Their Own Interests Ahead of the Company?
Corporate authority comes with obligations, and an executive cannot always put personal interests ahead of the company they serve. Corporate officers are often entrusted with significant authority. They may control company finances, negotiate contracts, develop relationships with customers and vendors, access confidential information, and identify new business opportunities. That position can also create opportunities for […]
What Happens When a Board of Directors Is Deadlocked?
When directors cannot agree, the dispute can prevent the entire company from moving forward. Disagreement among directors is a normal part of corporate governance. Boards are expected to debate strategy, evaluate risk, and sometimes reach different conclusions about what is best for the company. But there is a significant difference between disagreement and deadlock. A […]
Can a Majority Shareholder Use Their Control to Benefit Themselves?
Majority ownership gives a shareholder substantial influence over a company. It does not necessarily give that shareholder unrestricted authority to extract value from the corporation or disregard other owners’ rights.
When Can a Shareholder Challenge a Decision Made by the Board?
Corporate board directors are protected, but they are not immune. Serving on a corporation’s board of directors carries significant authority and equally significant legal responsibility.