Practice Area

Florida Shareholder, LLC & Partnership Litigation

Because minority owners of private businesses typically have no market to sell their interest, disputes between owners often take legal action, or the credible threat of it, to resolve. We advise owners from pre-suit through litigation, arbitration, and beyond.

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The disputes we handle

Further reading

We write regularly on these disputes. Browse the Insights archive by topic — e.g., Shareholder & LLC Member Oppression, Valuation, and Deadlock.

Common questions

What is minority shareholder or LLC member oppression?

Minority oppression comes in many shapes and sizes, but in general it is a campaign by those in control of a company to either (1) pressure a minority owner into selling their interest at a discount or (2) route more than a fair share of the company’s value to the people in control. It often involves stopped distributions; the removal of the minority as officer, director, or employee; dilution of the minority’s interest; ignored requests for financials; or offers to buy the interest for a fraction of what it is worth.

What are fiduciary duties?

Duties of loyalty and care owed by officers, directors, managers, and controlling shareholders or members to the company and, sometimes, to the other owners directly. The duty of loyalty requires putting the company’s interest ahead of one’s personal interests. The duty of care requires one to keep themselves reasonably informed and to act with care. Our Insights posts on fiduciary duties go through both in detail.

What is the business judgment rule?

The business judgment rule is a legal principle that protects a company’s directors, officers, and managers from personal liability if the decisions were made in the good faith exercise of their reasonable business judgment.

Does a claim require a written agreement?

No. Statutory and fiduciary protections exist independent of any agreement, though shareholder agreements, buy-sell agreements, and operating agreements shape which remedies may be available.

Am I entitled to see the company’s books and records?

Usually. Owners of Florida corporations and LLCs have statutory inspection rights, and most operating and shareholder agreements add to them. What you are entitled to see, on what notice, and for what stated purpose varies by entity type and by the category of record requested. A refusal to produce records is often the first clearly provable act in an owner dispute.

Can I recover my attorney’s fees?

Florida follows the so-called American rule, which means that unless there is a contractual or statutory basis to recover attorney’s fees, parties pay their own. Shareholder, operating, and buy-sell agreements often have attorney’s fees clauses, and statutes can allow for recovery of attorney’s fees where a company refuses a proper books-and-records inspection or in certain derivative actions. Entitlement to recover attorney’s fees can dramatically change the economics of a case, and careful consideration is a must.

What if the other owner is paying themselves but not making distributions?

One of the most common patterns in these cases, and not automatically improper — compensation for real work is legitimate, and owners have no general right to a distribution. It becomes a claim when the compensation is a disguised distribution, when it is set without a proper process, when it is extreme, or when it is used for an improper purpose, such as to compel a minority owner to sell their interest at a discount.

Do I sue the other owner or the company?

It depends on whose injury it is. Harm to the company, such as diverted revenue, usurped opportunities, or misused assets, generally belongs to the company, which means a derivative claim brought on its behalf, with its own procedural requirements. Harm unique to you as an owner is usually direct.

What is a derivative lawsuit?

A lawsuit an owner brings on the company’s behalf, to recover for a harm done to the company itself, when those in control will not bring the claim — often because they are the ones accused. Any recovery generally belongs to the company, not the suing owner.

Can one owner be forced to sell?

Not simply because the relationship has broken down. A buyout can come from a buy-sell or operating agreement, from a negotiated resolution, or as a remedy a court orders or a party elects in a dissolution proceeding. Which route is available depends on the entity, the governing documents, and the claims — and it drives who controls the timing and the price.

How is the value of an ownership interest determined?

It depends on many factors, including the standard of value, the valuation date, whether discounts for lack of control or marketability apply, how owner compensation and retained cash are treated, and how the company is “tax affected.”

What happens when the owners are deadlocked?

When the owners are deadlocked, the governing agreement comes first — voting provisions, transfer restrictions, and any tie-breaking procedure the owners agreed to. If those do not resolve it, the paths include a negotiated split or buyout, a court-appointed provisional director, a receiver or custodian, and judicial dissolution. The right answer depends on whether the goal is to restore decision-making, separate the owners, or wind the business down.

What if company assets are being moved or wasted while the dispute is pending?

That is when speed matters. Florida courts can appoint a receiver or custodian, and can enter other prejudgment relief, where the business or its assets are genuinely at risk — and in some circumstances that relief can be obtained without notice to the other side.

Is this going to mean a long trial?

Not necessarily. Many ownership disputes resolve through a negotiated buyout once each side understands its exposure and the likely valuation. The goal is to reach that point from a position of strength, not to litigate for its own sake.

Will the dispute become public?

Court filings are public in Florida. The fact of the suit, the allegations, and most of what gets filed will be visible unless there is a basis to seal particular material. Confidentiality agreements and protective orders can limit what enters the public record, but they do not make a case private. That exposure is itself a factor in how these disputes get resolved.

Do you represent minority owners or controlling owners?

Both. We bring claims for owners who have been excluded from management, denied information, or diluted, and we defend owners and companies against those same allegations.

How soon should I get counsel involved?

As early as possible. As disputes simmer, they can become stale. Information can disappear, memories can fade, and limitations periods and laches can bar certain claims. The best thing you can do is consult with an attorney early about collection of information and evidence and case strategy.