People often set-up limited companies with other shareholders because they consider that they will be better off with a larger entity than as a sole practitioner or sole owner. Whilst such businesses may be formed with the best of intentions and with clear objectives for success, sometimes, shareholder and director relations break down. Such disputes can arise through differences of opinion, strategic decisions, change of circumstances or personality clashes.
Such disputes between shareholders or directors can become bitter and costly affairs, affecting not just the individuals and their families but also the productivity and profitability of the business.
Unlike litigation, mediation can not only help to resolve the immediate shareholder dispute but can also consider repairing relationships to assist the business to continue. Shareholders will have previously worked together, shoulder to shoulder, to build and run the business. Whilst financial factors will frequently be relevant in resolving shareholder disputes, given this shared background, non-financial factors, such as recognition of contributions, genuine apologies and thanks, will often also have a role to play.
Mediation can assist in resolving disputes concerning:
- Breach of shareholder agreements
- Breach of directors' duties
- Breach of fiduciary duties
- Unfair prejudice to minority shareholders
- Family businesses
- Disputes over valuation
- Distribution of assets after dissolution
- Post-sale restrictions
Call Stephen Wood for an informal chat to discuss whether mediation could be suitable for your shareholder dispute.
