The Minority Oppression statute sets forth four remedies which a Court “may” order to remedy oppressive conduct. The Minority Oppression Statute provides that a Court may appoint a custodian, appoint a provisional director, order the sale of the corporation’s stock (per the statute) or enter a judgment dissolving the corporation. Id. The Statutory power of a Court to Order a stock sale is described in further detail in N.J.S.A. 14A:12-7(8). On its face, it appears that N.J.S.A. 14A:12-7(8) does not authorize a mandatory purchase by someone otherwise unwilling to buy the stock. Nevertheless, a Court may use it’s equitable powers to Order that shareholder to buy another shareholder’s stock if oppression is found. Bonavita v. Corbo, 300 N.J. Super. 179, 197-198 (Ch. Div. 1996). That is because in Brenner v. Berkowitz, 139 N.J. 488, 512-514 (1993), the New Jersey Supreme Court held that when a statutory violation such as oppression occurs, Courts retain their equitable discretion to fashion remedies. Hence, if a Court finds that the majority oppressed the minority it could order the majority to purchase the minority shares for “fair value,” even if the majority does not want to buy that interest.
Scott Unger is a Shareholder in Stark & Stark’s Lawrenceville, New Jersey office concentrating in Shareholder & Partner Dispute Litigation. For questions, or additional information, please contact Mr. Unger.