FLORIDA CORPORATE SHAREHOLDER OR LIMITED LIABILITY COMPANY MEMBER LITIGATION
Every day across the country, individuals decide to go into business with friends, family, acquaintances, co-workers, financial partners, and others. This is the classic “small business” experience, which is one of the major driving forces of our local, regional, and national economy. The small business can be a restaurant, a retail clothing store, surf shop, bar, nightclub, home health-care business, medical clinic, independent record label, import-export business, physical fitness center, laundromat, gas station or convenience store, a real estate deal to fix-up an older home and sell it, or any other type of business. Also, professionals, such as doctors, lawyers, engineers, accountants, real estate brokers, and financial professionals decide to practice their profession together and form partnerships and professional limited liability companies.
The sad part of the small business experience is that, in only a small fraction of the time do the owners take the time to carefully document the nature of their business relationship with their partners by signing carefully drafted shareholder agreements, limited liability agreements, partnership and joint venture agreements, which spell-out their rights and responsibilities to each other. Every business or partnership starts with the owners having the greatest of expectations, the belief that their business will always grow, that their partners will work as hard as they do and contribute the same amount of resources, that their partners are trustworthy, that difficult times will never come, and that their health will always be good. Shortly after going into business with each other, the owners find themselves obligated on bank loans, business premises leases, equipment and vehicle leases, and other complex documents, never really having given any thought as to the catastrophic life-changing events that can unfold when the relationship with their business partners unravels.
As lawyers, we see the best, and, unfortunately, the worst of human nature. Yes, we see “greed” incarnate. Frequently, we see situations where some of the partners in the business find themselves literally “thrown-out” of a business they co-founded and into which they have invested tens of thousands, and hundreds of thousands of dollars. These new clients come to us for representation and, when we ask to see copies of their partnership agreement, they unfortunately inform us that they never signed one. Or, they will give us a primitive form of agreement they and their partners signed which is grossly inadequate to help themselves out of the dilemma they find themselves in.
As lawyers, many times our job is to apply the legal knowledge we have acquired through years of experience, to try to resolve problems that could have been largely avoided had the business owners taken the time, and, yes, invested the money, in advance of forming the business to have properly drafted legal agreements in place to resolve the difficult problems that can arise between business partners. Fortunately, Florida law can provide remedies to such business owners who find themselves at the mercy of such business partners. Florida law creates remedies which allow a minority or equal percentage owner of a business to take action against the dominant business partner who is oppressing their interests. This is a very intricate are of the law, which requires the attention of a lawyer with substantial experience navigating Florida statutory and caselaw precedents, to be able to achieve a satisfactory resolution in court or through a settlement. These types of cases are similar to a marital divorce, except that in the area of Florida corporate shareholder or limited liability company litigation, it is business partners who are divorcing.
Among the types of cases in the area of Florida corporate shareholder or limited liability company litigation we handle are:
- Corporate shareholders’ derivative actions
- Corporate shareholders’ direct actions
- Inspection of corporate records litigation
- Corporate Officers and Directors litigation, including claims related to waste and mismanagement, breach of fiduciary duty, negligence and fraud
- Corporate Officers and Directors indemnification litigation
- Shareholders’ appraisal litigation
- Corporate receivership litigation
- Corporate ultra vires litigation
- Corporate dissolution litigation, whether brought by third-parties, shareholders, or the government
- Limited liability company members’ derivate actions
- Limited liability company members’ direct actions
- Inspection of limited liability company records litigation
- LLC Managing Members and Officers litigation, including claims related to waste and mismanagement, breach of fiduciary duty, negligence and fraud
- LLC Managing Members, Managers, and Officers indemnification litigation
- LLC receivership litigation
- General and limited partnership litigation, including breach of partnership agreement litigation, direct and derivative litigation against the general partner, claims related to waste and mismanagement, breach of fiduciary duty, negligence, and fraud