Director, Officer and Shareholder Disputes
Tuggle Duggins regularly assists corporate and individual clients involved in lawsuits, arbitrations and mediations between (a) shareholders, (b) shareholders and officers or directors of a corporation, (c) partners, (d) members of an LLC and (e) members and the manager or managers of an LLC.
We represent not only clients in North Carolina but other states as well. The meaning of shareholder agreements, partnership contracts, LLC operating agreements and securities offering documents often depends on the scope of the statutes that govern these entities and the judge-made law of fiduciary duties and good faith.
Shareholder disputes typically involve claims by minority shareholders that they have been defrauded, oppressed or victimized by illegal or wasteful conduct by the majority shareholder or shareholders. Often a buyout will be required. In a buyout, the value of the entity must be decided upon. Dueling experts are often engaged. It is essential to be familiar with theories of valuation.
LLC lawsuits can be similar, but LLC acts provide more flexibility than corporation statutes. In these disputes, generally the provisions of the operating agreement are pre-eminent. Nevertheless, the issues are very similar, such as whether a member should remain as a member and, if not, how (if at all) that member should be compensated for the release of membership interests. Money damages may be available in actions against LLC managers.
In a crisis, some of our clients have asked us to seek or defend against preliminary injunction actions, where one party seeks specific court orders designed to preserve the status quo (for example, to prevent an officer from absconding with the money, the improper disclosure of trade secrets, the raiding of clients or employees, or the lockout of a corporate officer or manager) while a dispute is being resolved. There are a number of good remedies for shareholder misconduct.
Related AttorneysCharles K. BlackmonClinton H. CogburnNatalie C. FolmarMichael S. FoxBenjamin P. HintzeDenis E. JacobsonBrandy L. MillsH. Vaughn RamseyJeffrey S. SoutherlandMichael J. Wenig