Shareholder’s Remorse • Franchise • Rescission
Ahmed v. Stein, PICS Case No. 16-1166 (C.P. Monroe July 18, 2016) Zulick, J. (9 pages).
Conflicting ideas about how to resolve a financial impasse with a restaurant franchise and how to handle existing debt and franchise obligations led to the minority shareholder feeling in the dark. He filed for judicial enforcement of his request to be kept informed of the daily transactions, and an injunction on the sale of the business until his shares could be valued and paid. On conclusion of the sale of his shares, the majority shareholders obtained a loan to carry out the requirement to maintain the franchise, and the minority ex-shareholder had a change of heart and sought return of his shares. The court determined that remedy was not possible under the relevant statute and denied plaintiff’s motion, except as to the provision of the necessary information for tax purposes.
