This video explains MCL 450.1489, the Michigan statute that protects minority shareholders in closely held corporations from “willfully unfair and oppressive” conduct by those in control.
What this video covers
- Why minority owners in closely held companies need protection when there is no ready market for their shares
- What “willfully unfair and oppressive” conduct means
- Common patterns, such as paying insiders instead of dividends, firing a minority owner, or withholding records
- What the statute does not cover, such as ordinary business judgment calls
- Remedies, from a court-ordered buyout at fair value to damages
What can a minority shareholder do about oppressive conduct in Michigan?
The companion article explains that courts look at whether those in control substantially interfered with a minority shareholder’s rights or reasonable expectations, such as an understanding that the investor would have a job, a management role, or access to company information. The claim belongs to the shareholder personally; harm to the company as a whole belongs in a derivative suit brought on the company’s behalf.
Courts have flexibility in fixing the problem. A common request is a court-ordered buyout of the minority’s shares at fair value. Courts can also award damages, appoint a receiver, change governance provisions, or undo improper transactions. Dissolution is available but is described as a last resort.
Read the full article: Minority Shareholder Oppression in Michigan: Understanding MCL 450.1489
If you are a business owner involved in a dispute among shareholders, contact Tishkoff PLC through our contact page or call 734.663.4077.
This video and page are for general informational purposes and do not constitute legal advice. Watching the video or reading this page does not create an attorney-client relationship. You should consult counsel for advice on your specific circumstances.