Closely held businesses such as private corporations and LLCs face a constant uphill battle to grow and profit. Even the best-laid business plans will face challenges in a number of directions.
One of the biggest challenges is disagreements among leadership or between leadership and the shareholders whose interests the leadership is obligated to serve.
These disagreements can disrupt the operations of an Illinois business and diminish its performance. In some cases, the result of a disagreement is costly and complex litigation, including multi-party litigation or even a class action lawsuit.
Oftentimes, the worst outcome of these cases is the shuttering of a promising business and financial losses to all parties involved.
Early and careful handling of a shareholder dispute may lead to the best outcome
The leadership of partnerships, closely-held corporations, and LLCs all have fiduciary duties to act in the best interest of their organizations. However, what is a person’s duty to their business, and whether they have fulfilled that duty, are often highly fact-specific questions.
Moreover, the relationship between the board, corporate officers and shareholders is a network of oftentimes complicated bylaws, contracts and other legal documents.
Many times, the language of these documents will determine the outcome of a legal shareholder dispute.
Although sometimes the best course of action is to go to court, businesses in the Godfrey and Alton communities should recognize the cost of litigation in terms of time, money, human resources and risk.
Having an experienced legal professional involved early on in a shareholder dispute may help save many of these costs.
One of the first steps in resolving disputes is to do a careful analysis of all important legal documents as well as a detailed investigation into the facts and circumstances. This investigation may involve a deep dive into financial and other business records.