When majority shareholders abuse their power, minority shareholders can feel powerless, but the law is on their side. Our recent case shows the difference a strategic approach can make, achieving justice and financial relief for a minority shareholder in a technology company—ultimately boosting their financial position by approximately $2 million.
The Challenge: Power Abused, Rights Denied
Our client, a director and one-third owner in the company, was sidelined and unfairly targeted. Their fellow shareholders, in a bid to secure more control and profits for themselves, terminated their employment, removed them from the board, and substantially increased their own remuneration. They funneled company assets for their personal gain, reducing the company’s profitability—and thus the value of their shares. Their goal was clear: pressuring our client into an undervalued buyout. But they refused to be a victim of their oppressive scheme.
Our Approach: Decisive Action Against Oppression
We took swift legal action, filing for relief in the Supreme Court to protect our client’s rights. Our strategy focused on their reinstatement as a director and securing a buyout of their shares at fair value. We presented compelling evidence of the directors’ unfair practices and worked with valuation experts to ensure their stake was fairly assessed. In cases like these, once oppression is proven, the court can mandate that the majority buy out the minority’s shares at a value that reflects the true worth of the business—ignoring typical minority-share discounts like lack of control. This legal protection often surprises oppressors and prevents them from profiting from their misconduct.
A Winning Outcome: Full Value, No Discounts
Our client’s determination, paired with our legal strategy, led to a significant win. The court ordered a buyout on terms that disregarded the artificial devaluation caused by the oppressors, along with the usual discounts for minority shares. This resulted in an approximately $2 million benefit to our client—a fair outcome that protected their interests and upheld their rights as a shareholder.
We stand for you
Shareholder disputes are challenging, but the right approach and experienced legal support can make all the difference. Our team is committed to protecting minority shareholders from oppressive practices. For a no-obligation discussion about your shareholder rights, contact the team at 1300 757 534.
