Shareholder Disputes

Shareholder disputes can be complex and, expensive, often involving a fallout between friends and family, directors and investors, and even between directors (when each also own shares). Gibbs Wright Litigation Lawyers can help you work towards a resolution that protects your rights in the most cost-effective way possible.

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Do you need a shareholder dispute lawyer?

Shareholder disputes refer to conflicts or disagreements between shareholders and the company. Often, these disputes can be resolved without the need to involve court proceedings, as it is usually the case that the situation has become critical, impacting both parties who are desperate to resolve the dispute, and sometimes with one or both parties wanting to leave the business altogether. Whether mediation or legal proceedings are necessary, Gibbs Wright can help.

Shareholder disputes can arise for various reasons, including:

  • disagreements over company management
  • decision-making, financial matters
  • breach of shareholder agreements
  • breach of director’s duties; and
  • differences in compensation and responsibilities
Disputes also often occur when shareholders have conflicting interests or perceive unfair treatment within the company. These disputes can emerge from the usual running of the company, through to issues during mergers, acquisitions, or changes in company direction. Like other types of company disputes, shareholder disputes are complex and can be very expensive not only for the shareholders but also for the company, as disputes can impact its day-to-day operations. If you notice any early warning signs of potential conflict within the company, such as disagreements or financial disputes, contact us and we’ll help you attempt to prevent issues from escalating. Also, if you believe there’s a breach of shareholder agreements, oppressive conduct, or misconduct within the company, speak with our corporate litigation lawyers and we’ll help you understand your rights and explore potential legal remedies to your dispute.

How to get started

Litigation can be complex and daunting, but we’ll make the process easier for you. Book a complimentary call today.

1

Tell us your
legal matter

Speak to one of our litigation lawyers via phone for free and provide the necessary details and documents so we can better understand your situation.
2

We’ll let you know
where you stand

If we think that you have a good argument, we’ll devise a strategy for you on how we will take on your matter, and give you legal guidance and a fee estimate. All for free.
3

You Decide

It’s ultimately your decision whether to hire us or not based on the strategy and fee estimate we gave you. There’s no obligation and no pressure to proceed.
1

Tell us your legal matter

Speak to one of our litigation lawyers via phone for free and provide the necessary details and documents so we can better understand your situation.
2

We’ll let you know where you stand

If we think that you have a good argument, we’ll devise a strategy for you on how we will take on your matter, and give you legal guidance and a fee estimate. All for free.
3

You Decide

It’s ultimately your decision whether to hire us or not based on the strategy and fee estimate we gave you. There’s no obligation and no pressure to proceed.

Why Gibbs Wright

Our team of litigation lawyers are committed to protecting your rights and getting the best possible outcome for your situation.

What we do is very simple: we sue people, defend people when they get sued and negotiate resolutions to disputes to prevent proceedings from commencing. It’s the only thing we do and we do it really well.

Having done this for many years, we know the law and the legal processes like the back of our hands. But more importantly, we know how to win. No matter the industry you’re in or how complex your situation is.
When we take on your legal matter, you know that our team of expert litigation lawyers will fight for you not just for the sake of it. We will fight relentlessly so you can get back to business as soon as possible.  

Hear it from our satisfied clients

Expert litigators, ready to fight for you.

Spencer Wright

Litigation Director

Spencer leads the strategic operations at Gibbs Wright, with a wealth of knowledge on Queensland law and business operations.

Melany Dowse

Special Counsel

Melany represents a range of clients from individuals and small businesses to body corporates and insolvency practitioners.

Mitchell Caldwell

Senior Litigation Solicitor

Mitchell provides practical, accurate and timely advice and unique solutions to assist corporate clients, small businesses and individuals across a range of areas including property, contract, and construction disputes. Mitchell works closely with all the team members of the firm to ensure that Gibbs Wright delivers first-class legal service, advice and representation.

Emma Bettridge

Special Counsel

Emma is an experienced commercial litigator with a proven track record of success in complex commercial disputes. With a wealth of experience obtained in both boutique and tier one firms, Emma is dedicated to providing her clients with practical and solutions-oriented advice.

David Thomas

Litigation Solicitor
David has practised predominantly in the areas of building and construction, commercial litigation and dispute resolution. Prior to becoming a lawyer, David was a construction electrician in the mining and oil and gas industries working on some of the largest projects in Australia.

John Clemente

Litigation Solicitor

John’s commitment to his clients is unparalleled. He is deeply perceptive, ensuring that every client receives personalised and effective counsel.

Frequently Asked Questions

  • What is a shareholder?

    A shareholder is an individual or entity that owns one or more shares of stock in a company. Shareholders are often referred to as equity owners of the company because they hold a portion of the company’s ownership. Shareholders can include individuals, institutional investors, such as mutual funds or pension funds, and other entities like corporations or trusts.

    Not all shareholders are created equal, and there are categories of shareholding that may impact who holds the equity and voting rights in the company. It is important to determine if all shareholders are the same (for example, ordinary shareholders) or if some shareholders have special categories of shareholding that limits their rights.

  • What are the differences between majority shareholders and minority shareholders?

    A minority shareholder can be any person or entity that owns and controls less than 50% of all shares issued by a company. Technically, minority shareholders combined can end up holding the largest interest in the company; for example, three shareholders who each have a 20% interest share against one single shareholder who holds the remaining 40% interest. Usually, however, most minority shareholder disputes relate to a minority shareholder that has less than 50% of the shares (whether individually or within a voting block).

    As a majority shareholder (or group of shareholders) in effect owns a larger portion of the company, it follows that the majority shareholder will also have more power and control the company.

    Although minority shareholders do hold some power, they will never hold final controlling power over a company without owning a majority of that company’s shares.

    However, minority shareholders do have legal rights that a company must follow. These rights include:

    • access to shareholder meetings;
    • access to record books of the company (some restrictions apply);
    • the right to address directors at meetings; and
    • the right to address shareholders at meetings.
  • What is minority oppression?

    Although there are no defined limits on what constitutes shareholder oppression, it will generally occur where a minority shareholder is subjected to unfairness or prejudice by the abuse of a major power.

    The Corporations Act 2001 (Cth) (the Act) section 232 deals with actions of the company that are contrary to the interests of shareholders or oppressive to, unfairly prejudicial to, or unfairly discriminatory against a shareholder or shareholders. 

    Minority oppression, therefore, is wide reaching. Speak to Gibbs Wright about your dispute. We act for companies and shareholders in minority shareholder oppression actions.

  • What constitutes oppression or unfair treatment of minority shareholders?

    Oppression or unfair treatment of minority shareholders can encompass actions such as excluding them from decision-making, withholding dividends, diluting their shares, conducting squeeze-outs, misappropriating assets, engaging in unfair related-party transactions, or breaching shareholder agreements. 

    Such conduct can be challenged under the Corporations Act 2001 and common law. Minority shareholders have legal remedies that may include seeking court orders for relief, such as a buyout of their shares at a fair value or appointment of a receiver or manager, to protect their interests when facing oppressive behaviour or unfair treatment. 

    Consulting with a shareholder dispute lawyer like us is advisable for those in such situations to assess their specific circumstances and explore potential legal actions.

  • What are the remedies for minority oppression?

    A minority shareholder who has been the victim of minority oppression or prejudicial or unfair treatment can apply to the court for relief. Under section 233 of the Act, the court has discretion to make “any order that it considers appropriate” concerning the company, including:

    • that the company be wound up;
    • that the company’s existing constitution be modified or repealed;
    • regulating the conduct of the company’s affairs in the future;
    • for the purchase of any shares by any shareholder or person to whom a share in the company has been transmitted by will or by operation of law;
    • for the purchase of shares with an appropriate reduction of the company’s share capital;
    • for the company to institute, prosecute, defend or discontinue specified proceedings;
    • authorising a shareholder, or a person to whom a share in the company has been transmitted by will or by operation of law, to institute, prosecute, defend or discontinue specified proceedings in the name and on behalf of the company;
    • appointing a receiver or a receiver and manager of any or all of the company’s property;
    • restraining a person from engaging in specified conduct or from doing a specified act; and
    • requiring a person to do a specified act
  • How do you resolve a shareholder dispute?

    Shareholder disputes can be resolved through various methods, depending on the nature and complexity of the dispute. These methods may include negotiation, mediation, arbitration, or, in some cases, litigation. 

    Initially, parties often attempt to reach an amicable resolution through negotiation or mediation, with the help of lawyers or professional mediators. If these methods fail, the matter may proceed to arbitration or court, where a judge or arbitrator will make a final decision based on the evidence presented.

  • What is an example of a shareholder dispute?

    An example of a shareholder dispute could involve minority shareholders in a closely held family business who feel they are being unfairly treated by majority shareholders. The minority shareholders might allege that they are not receiving their fair share of profits or have been excluded from important business decisions. This dispute could escalate if the majority shareholders refuse to address these concerns, potentially leading to legal action or a buyout of the minority shareholders’ shares.

  • What are the disputes between shareholders and directors?

    Disputes between shareholders and directors often revolve around issues of corporate governance and management decisions. Shareholders may disagree with decisions made by the board of directors, such as executive compensation, mergers and acquisitions, or strategic direction. 

    Directors have a fiduciary duty to act in the best interests of the company and its shareholders, which can sometimes lead to conflicts when shareholders believe those duties are not being fulfilled. 

    These disputes may involve allegations of mismanagement, breach of fiduciary duty, or oppression of minority shareholders. Legal counsel is often sought to navigate such conflicts and determine the appropriate course of action.

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