Representation of a Minority Shareholder when Denied Ownership Claim

Seth Schwartz represented a minority shareholder when the majority shareholder of a used printing press business denied the minority shareholder’s ownership claim, contrary to the parties’ agreement.

Our client only agreed to leave his former employer on the condition he would be a shareholder in the new enterprise. Upon reaching that agreement, our client left his employer and began working full time at the used printing press company. During the first year of his work at the new company, our client was generally treated as a partner. Our client was held responsible for expenditures of the company, including taxes, and was the only person responsible for writing checks on the behalf of the LLC. He also personally signed a lease for heavy equipment to be used by the business. In addition, the founder introduced our client as a partner to others.

After the company was very successful, the majority partner changed the compensation structure so all “partners” were making equal pay. Considering our client devoted his full-time energies to the company while other “partners” were involved with other ventures, our client disputed the new payment structure. When the dispute arose, the majority partner denied our client’s ownership of the business.

The matter proceeded to a jury trial, during which it was settled to our client’s satisfaction.