Shareholder disputes can be toxic. It can result in:
- Creditors not being paid;
- Staff not being paid;
- Directors taking remuneration they are not entitled to;
- Transactions occurring without consent;
- Loss of key suppliers or customers; Unilateral decisions being made;
- Assets being stripped; and/or
- The true financial details of the Company being hidden.
Brent Norling and Xinan Zhang of Norling Law discuss the traditional approaches to resolving a shareholder dispute and a little known provision of the Companies Act 1993 that is not often used which can be useful for resolving toxic shareholder disputes. Often the ‘toxic’ shareholder is acting in the way they are out of a false sense of security and the perceived lack of options available to other (usually minority) shareholders. It is important that shareholders be fully aware of the options available, so a proper and fully informed decision is made. Our shareholder dispute lawyers offer a free legal consultation where we can discuss the issues and formulate the best strategy to resolve them. You can book a free consultation or download our E-book: The Five Options to Resolve Shareholder Disputes
