Turner Padget Client Thwarts Inequitable Attempts of Minority Shareholder To Protect His Self-Dealing

In a recent two-day Circuit Court trial, Turner Padget attorney Jeff Payne successfully defended the passive majority shareholder of a closely held corporation against an attempt by an active minority shareholder to obtain additional shares in the corporation.

The attempt was an effort by the minority shareholder to protect jobs and benefits provided to himself and his family by the corporation. The minority shareholder also sought to protect a competing business operating with corporate assets – that business was discovered during the discovery phase of the lawsuit. The minority shareholder had created these perks through his position as the day-to-day manager of the business. The attempt to secure additional shares was also based upon this management service.

At the trial’s conclusion, the court determined that the minority shareholder had breached his fiduciary duties and had “unclean hands.” Thus, the court denied the equitable injunction sought by the minority shareholder and also refused to issue the requested corporate shares to that minority shareholder.