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The Benefit of Requiring an Unhappy Shareholder or Unhappy Member in a Closely Held Business to Sue Derivatively

May 8, 2016
P. Benjamin Zuckerman

So, the aggrieved shareholder or member of a closely held company has brought an action against your clients, the directors or managing members of a closely-held company, claiming, among other things, that your clients breached their fiduciary duty to the company and the aggrieved shareholder or member. The courts have made it clear that this type of claim should have been brought as a derivative claim, not a direct claim.  Should you let it go?

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Beware: You May Not Have a Direct Claim Against Your Bad-Acting Co-Shareholder or Co-Member

March 7, 2016
P. Benjamin Zuckerman

It is inevitable. When co-owners (whether members of a limited liability company or shareholders of a corporation) split-up or reach the split-up point, one inevitably thinks the other or others have wronged him, that the other or others have breached their fiduciary duty to him.  Beware.  Two fairly recent cases from Florida appellate courts make it clear that such claims may not be available.

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