Business Litigation Between Shareholders Involving
The New York Close Corporations
Our New York Corporate litigation lawyers have handled many litigation cases involving shareholders when a business falls apart. Shareholders in a close corporations are more like partners. In fact, running a business in a close corporation is like being in a marriage. Too often one partner feels they are entitled to more, and they cheat, engage in self dealing, and even compete against the business. All too often, the majority shareholder or managing principal, pushes out, freezes out or takes advantage of their position to harm the minority shareholders. Our New York and Westchester commercial litigation lawyers have represented numerous shareholders in close corporation disputes among the shareholders. Our New York business lawyers regularly appear in the New York Supreme Courts in Manhattan, Queens, the Bronx, Brooklyn, Westchester, Rockland, and Nassau.
New York law holds that those in control of a business must deal fairly with the interests of the investors and this is so regardless of whether the business is in corporate or partnership form. The directors and officers of a corporation are its agents, and they occupy a fiduciary, or more exactly a quasi-fiduciary, relation to the stockholders and are bound by all those rules of conscientious fairness, morality, and honesty in purpose, which the law imposes upon the fiduciaries and they are held, in official action, to the extreme measure of candor, unselfishness, and good faith. They are also bound to exercise the utmost good faith and loyalty in the performance of their duties, to be scrupulous in such performance, and to act at all times in the interests of the corporation and the stockholders, and not for personal benefit or advantage. Directors must always be free from fraud in their relations with their shareholders and they are trustees for the corporation’s stockholders, who occupy a position of trust. Because the power to manage the affairs of a corporation is vested in the directors and majority shareholders, they are cast in the fiduciary role of guardians of the corporate welfare. In this position of trust, they have an obligation to all shareholders to adhere to fiduciary standards of conduct and to exercise their responsibilities in good faith when undertaking any corporate action, including a merger. A fiduciary must refrain from placing himself in a position where his personal interest or that of a third person does or may conflict with the interest of the beneficiaries. The fiduciary in charge of a corporation must treat the minority shareholders fairly and all corporate responsibilities must be discharged in good faith and with “conscientious fairness, morality and honesty in purpose.
For violation of their duty resulting unlawful gain to themselves, directors and officers are liable to account in equity, the same as ordinary trustees. Even actions that are in compliance with statutory requirements are still subject to the limitation that such conduct may not be for the aggrandizement or undue advantage of the fiduciary to the exclusion or detriment of the stockholders.
Our New York business lawyers have handled numerous dissolution proceedings, accounting proceeding, unjust enrichment actions, actions for tortious interference with contractual relations or economic advantage, unfair advantage actions and actions for breach of fiduciary duty. We are small business owners and are understanding of the problems that arise between shareholders in a close corporation. Our New York and Westchester business attorneys often handle business disputes on contingency thereby allowing those shareholders who have been cheated to obtain the justice they deserve without the need to outlay a large legal fee up front and large hourly fees. We provide the experience and knowledge of high priced law firms on a contingency basis. Our New York and Westchester corporate litigation lawyers believe that the ability to pay should not be an obstacle to a business person receiving what they deserve.
From our White Plains office, we represent clients with business interests in the Westchester, Rockland and Bronx areas. From our Forest Hill office, we represent clients with business interests in Queens, Brooklyn and Long Island. From our Manhattan office, we represent our Manhattan and New York City business clients.
Our consultations are always free.