A client came to me complaining that he had been “squeezed out” by the majority shareholders of the closely held corporation he himself had founded. He was outraged and upset.
I assured him that the majority shareholders of a closely held corporation do indeed have a fiduciary duty to protect the interests of minority shareholders, as held in Weisbecker v. Hosiery Patents, 356 Pa. 244 (1947), and Bair v. Purcell, 500 F.Supp.2d 468, 483 (M.D.Pa. 2007). But, he wondered, what does that mean exactly? How can you tell when the duty’s been breached? And what can you do about it anyway?
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