Hickory, NC Shareholder Disputes Attorney

Shareholder disputes are common occurrences and can result in significant financial damage for businesses and shareholders. Business owners, commercial entities, and shareholders in Hickory, NC, need effective legal protection for their financial interests as well as effective recourse when disputes arise. 

At Patrick, Harper, & Dixon, our shareholder disputes lawyers provide these services as well as on-point guidance for clients involved in shareholder disputes. 

If you or someone you care about is dealing with a shareholder dispute or other issue, Patrick, Harper, & Dixon in Hickory, NC, can potentially help settle the matter and make you whole. Contact our office for a consultation today and learn how we can help.

Types of Shareholder Disputes

The world of business may be quite varied, but the same shareholder issues arise in all of them. In most cases, money is at the heart of these disputes, whether they’re disagreements about resource allocation or allegations of fraud

Breach of Fiduciary Duty

A fiduciary duty exists when one party has the duty to act in the best financial interests of another party. The following parties typically have a fiduciary duty to shareholders:

  • Corporate officers and directors
  • LLC managers
  • Partners of a partnership

Acting contrary to the best interests of a shareholder can give them the right to legal action for damages and might include acts such as:

  • Paying unreasonably high salaries, bonuses, or other financial remuneration
  • Nepotism and legacy benefits
  • Rent gouging by a landlord who is part of the company
  • Buying goods and services from companies owned by the manager or director

General neglect of duty may also be alleged for failure to conduct business operations reasonably and prudently. 

Breach of Shareholder Agreement

Breaches of the material terms of a shareholder agreement are common causes of shareholder disputes. Common breached terms include breaches of:

  • Decision-making rules, such as improper voting
  • Rules relating to the transfer or selling of company shares
  • Confidentiality

Shareholders do well to gain a comprehensive understanding of their share agreements. Furthermore, retaining an experienced shareholder agreement lawyer would help ensure a business or shareholder has the full protection of the law in matters involving breaches. 

Oppression of Minority Shareholders

Minority shareholders have a stake in companies but have no decision-making authority. Unfortunately, majority shareholders, who have 51% or more of the shares in a company, sometimes take actions that unfairly and unlawfully “oppress” minority shareholders. 

Without decision-making authority, minority shareholders find themselves helpless. They may, however, take legal action. 

Common examples of minority shareholder oppression include:

  • Withholding dividends or distributions unreasonably
  • Failure to provide access to company records and books
  • Wrongful termination
  • Excessive compensation to officers, managers, or vendors

Essentially, any act that prevents shareholders from fully benefiting from the relationship or exercising their rights might be considered oppression of a minority shareholder. 


Fraud exists when a party misrepresents or fails to disclose a material fact knowingly or recklessly. More specifically, a person claiming fraud must allege that it:

  • Intentionally misrepresented or concealed a material fact
  • Was reasonably designed to cause deception
  • Ultimately caused deception
  • Led to harm to the claimant

Fraud allegations must be made with particularity and will be dismissed without elements such as the time, place, and nature of the fraud, the party who engaged in the fraud, and what was gained from the fraudulent behavior. 

Dissolution Issues

A dissolution means the end of a company or business venture. What happens next is the distribution of company property and assets. This process can be quite contentious as some may not desire the dissolution or may oppose how it takes place. 

Resolving Shareholder Disputes

Taking legal action is an effective way to resolve shareholder disputes. Interested parties are strongly recommended to retain experienced counsel as soon as an issue might arise or long before one does. 

Generally, shareholders file derivative claims based on their ownership of shares of the company and on behalf of the company. However, in North Carolina, certain shareholders may also file a direct claim of breach of fiduciary duty, even when a valid derivative claim exists. 

Avoiding Disputes

Experienced shareholder disputes and business lawyers also help their clients avoid disputes altogether. In the end, the steps necessary to prevent a problem are much less costly than those needed to resolve one. 

With specifically tailored guidance, attorneys help business owners plan and draft legally sound agreements that protect their financial interests as well as fairly treat shareholders.

Experienced attorneys can also anticipate unavoidable issues that may arise and provide terms in the agreement to deal with said issues. When one does arise, a method of dealing with the problem is already contained within the agreement. 

Speak With a Lawyer for Shareholder Disputes Today

Patrick, Harper, & Dixon works diligently to safeguard the financial interests of Hickory, NC, business owners and shareholders. For effective guidance and representation in shareholder disputes of any nature, contact our office to discuss your case with an experienced shareholder disputes lawyer.