Houston Shareholder & Partnership Dispute Lawyers
Helping Businesses in Texas Prevent and Resolve Management Disputes
Sometimes, legal disputes – such as shareholder and partnership disputes – are an inevitable part of doing business. Issues can arise from conflicts in personality, disagreements between majority and minority shareholders, violations of operating guidelines, breach of fiduciary duties or bad faith situations. If you are involved in any business dispute, do not delay in contacting our business law firm.
Backed by decades of experience, the attorneys at Hendershot Cowart P.C. can provide the aggressive protection you need when complex legal issues arise. You can count on our Houston law firm for in-depth analysis of your shareholder and partnership rights and all paths to resolution, including mediation, arbitration, and the effective prosecution or defense of your case in court.
Our shareholder and partnership dispute law firm has extensive experience successfully litigating all types of complex disputes. We advise, represent and provide legal counsel in the following areas:
- Fraudulent transfers
- Shareholder buyout agreements / partnership buyout agreements
- Minority shareholder oppression, including freeze-outs, squeeze-outs and lockouts
- Obstructed access to books and records
- Breach of fiduciary duty
- Disputes over funding of business operations
- Business asset misuse
- Disputes over distributions, dividends and compensation
- Deadlock among board members and shareholders
- Breach of contracts
- Shareholder disputes
- Theft of trade secrets
- Intellectual property disputes, including theft of trade secrets
- Confidentiality agreements
- Non-compete agreements
- Non-solicitation agreements
- Hostile takeovers/buy-outs
- Dissolution of business
- Business owner disputes
Shareholder Disputes Over Buy-Sell Agreements
In general, a buy-sell agreement provides for the future sale of owners' interests if some specified event happens, such as death, disability, retirement or termination.
A buyout agreement determines:
- Who can buy a shareholder's stock
- Whether the company must buyout the shareholder
- How to measure the value of a shareholder's interest
- Payment terms for a buyout
We aggressively address common buy-sell conditions and potential areas of conflict including:
- Events that trigger a buy-sell: In some cases, business partners are in agreement that one partner should leave the business. But in others, disputes arise over whether a partner can be forced to buy or sell under the agreement.
- Inequitable buy-sell agreements. Disputes may arise when the provisions of a buyout agreement lead to unfair results. We also handle buyout agreements with noncompetition and nonsolicitation covenants.
- Valuations of property. The valuation of business assets, including good will and Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA), is at issue in many buy-sell agreements. We negotiate and litigate valuation disputes, including complex disputes.
- Divorce of a Shareholder: Upon the divorce of a shareholder, it is possible for a court to award shares of stock to the non-shareholder spouse. We can negotiate and draft a shareholder agreement that provides terms and procedures for the divorcing shareholder to have first right to purchase the former spouse’s shares and remaining shareholders with options to purchase them if the divorcing spouse doesn’t.
Addressing Shareholder Distributions, Dividends and Compensation
Shareholders have a right to a proportionate share of the profits when the directors of the corporation distribute company profits and dividends. Our business law firm can protect your rights in disputes over dividends, compensation and distributions that arise in many situations, including:
- Shareholder disputes regarding when and how to issue dividends and compensation
- Failure to pay dividends or distributions
- Disputes over compensation packages for executives
- Problems that arise due to inadequate stock and dividend policies
Shareholder Derivative Lawsuits & Individual Shareholder Claims
Shareholder derivative lawsuits are claims shareholders bring on behalf of a company, and they can be a powerful tool for fighting corporate misconduct, ensuring accountability, or bringing action against third parties who may have contributed to their losses. Derivative suits are typically brought when corporations are unable or unwilling to bring valid lawsuits, such as claims against directors or officers who breach their fiduciary duty and are unlikely to bring claims against themselves for misconduct such as self-dealing, misrepresentation, and corporate waste. They can also be the foundation of litigating shareholder disputes involving oppression, as many procedural requirements for most corporate owners are waived for those in closely held corporations.
Aside from shareholder derivative suits, which are brought on behalf of the corporation and all of its shareholders, individual shareholders can also bring direct shareholder claims to enforce legal obligations they are owed by corporations, including directors and officers. They may be used to address individual losses resulting from the corporation’s misconduct, and when asserting direct claims to fight shareholder oppression.
Shareholder Disputes in Closely Held Businesses
Closely held corporations create substantial risks when it comes to minority shareholders and their vulnerable ownership interest, including risks of shareholder oppression or “squeeze-outs” and “freeze-outs.” In Texas, the landmark ruling Ritchie v. Rupe, which struck down the shareholder oppression cause of action, has made shareholder litigation involving closely held businesses a relative new frontier. However, minority shareholders still have rights to hold majority shareholders accountable and pursue legal remedy based on other causes of action.
How We Help Businesses Avoid Litigation – Shareholder and Partnership Agreements
When partnerships and shareholder rights are properly recorded, conflict can often be contained and resolved effectively to prevent business disruptions, lost value, and above all, litigation. At Hendershot Cowart P.C., our experienced business partnership attorneys have been drafting partnership and shareholder agreements for over 30 years.
We Can Help With Shareholder and Partnership Agreements Including:
- Defining shareholder responsibilities and authority and the rights of shareholders in making business decisions
- Partnership buyouts or transfer of ownership, including the process for the removal or replacement of company officers
- Voting rules for decision-making
- Methods for evaluating, preventing, and resolving disputes
- Options for the removal of potentially harmful shareholders
Know where you stand in any business, partner, or shareholder dispute. We handle cases throughout the state, so contact our partnership dispute lawyers today to discuss your case. Reach us at 713-909-7323 or send us a message online.
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