Disputes between shareholders are typically undesirable circumstances for a company’s operations, especially when those disputes lead to a deadlock in the decision-making process on the shareholders meetings or among directors. Reasons behind such disputed are often disagreements regarding direction of company’s management, bad personal relationships, conflicted interests, misleading results, etc. Potential shareholder disputes are irrespective of a company good or poor performance, yet such disputes will as a consequence result in additional costs and discontinuity in company’s business activity. Therefore, it is desirable to take appropriate steps to prevent their occurrence, to at least prevent a standstill of decision-making processes until the shareholders dispute is resolved.
Prevention of possible dispute is best achieved through a designed contractual arrangement of their relationships, especially in smaller companies more likely to fall into a deadlock. Each company has certain specifics regarding its business activities, its shareholders’ interests and possible scenarios in which both the company and its shareholders may find themselves one day, and due to which each contract between shareholders is specifically tailored to suit their specific needs. A designed shareholders agreement can provide to the conflicting parties with options of exiting the company with adequate consideration after which the company can continue to operate without internal shareholders’ relationship impediments. Given that conflict prevention is a better approach than conflict resolution, we regularly advise our clients- shareholders in shareholders conflict risk management before conflict even occurs.
If the dispute between the shareholders arises, our team provides a detailed analysis of the legal possibilities for all parties based on the contractual rights and obligations and current legal framework and the consequences of maintaining such status for the company and its shareholders. We advise clients in disputes arising out of the shareholders agreements, joint venture, a minority or majority shareholders claims, post-acquisition relationships, M&A and extraditing minority shareholders bids.
We strive to provide advice which is not only the best for our client’s position, but also at the least harmful for the regular business performance of a company where a shareholders dispute arose.