Can a Shareholder With a Minority Ownership Interest in a New Jersey Company Be Fired?

HNW Business Law, Shareholder Rights Litigation

• Shareholders are often employees of the company they own • Majority Shareholder will sometimes “fire” and dismiss a minority shareholder as an employee • This article discusses a recent New Jersey case where the minority shareholder was fired and then sued the company and her co-shareholders In a recent N.J. case a shareholder with a 12% ownership interest in a small corporation appealed her dismissal as an employee claiming minority shareholder oppression while employed as an at-will employee. She contended that she had a reasonable expectation of continued employment after a thirteen-year history with her former employer, and that her at-will employment designation was irrelevant. The employee had also signed a Shareholder Agreement which stated that she contracted to …

Online Business Reputation and Defamation Cases: Part 5 ON APPEAL

HNW Business Law, Partnership Rights Litigation, Shareholder Rights Litigation

By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold, NJ Business Litigation Attorney In this 5 part series, I have discussed a case involving a business that claimed defamation against negative online reviews believed to have been made by the defendant to retaliate as their landlord-tenant relationship dissolved. Early on we discussed how the reviews were tied back to the defendant and how they were relevant to the plaintiff’s claims. In Part 4 we learned that the court ruled in favor of the defendant. In this final piece of our series, I will discuss the appeal of the court’s decision. On appeal the court came to the conclusion that the erroneous wholesale exclusion of the Yelp evidence …

Online Business Reputation and Defamation Cases: Part 4 Breach of Contract Cause of Action: Trial Level

HNW Business Law, Partnership Rights Litigation, Shareholder Rights Litigation

By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold, NJ Business Litigation Attorney In this series I have discussed a case that involved a business claiming online business reputation and defamation caused by Yelp posts believed to have been written by the defendant. In Part 3 I discussed the four general elements that must be proven to establish a defamation of character claim, as well as examined the Yelp evidence and the court’s view of it. Remember many lawsuits can contain anywhere from one, or more additional contract and business tort claims.  The court deals with each claim separately.  In this case, the court had to deal with a series of contract claims which principally alleged that …

Online Business Reputation and Defamation Cases: Part 3 The Defamation Cause of Action: Trial Level

HNW Business Law, Partnership Rights Litigation, Shareholder Rights Litigation

By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold, NJ Business Litigation Attorney Previously in this series I discussed the dissolution of a relationship between a business and its landlord as well as potential evidence in the form of negative reviews on the website Yelp. In Part 2, I discussed the importance of available e-discovery methods and what is known as “pretrial discovery on defendant’s financial condition.” In Part 3, I will dive deeper into the trial portion of the case and the effects of the evidence presented. Before we conclude our final review of a complex business tort lawsuit, it will be helpful to discuss the four general elements that must be proven in nearly all …

Online Business Reputation and Defamation Cases: Part 2 Overview of Evidence and Pre-Trial Motion

HNW Business Law, Partnership Rights Litigation, Shareholder Rights Litigation

By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold, NJ Business Litigation Attorney In Part 1 of our series, we learned about a dispute between a business and the landlord for their commercial lease. After a dispute began to dissolve the relationship, the defendant was believed to have posted negative reviews of the business on the website Yelp. In Part 2 we will learn a bit more on how those Yelp reviews effect the case. Before the Yelp postings emerged, the plaintiffs had a claim for breach of contract, but once they discovered the libelous postings, they amended their complaint to also include defamation of business character and reputation.  The Yelp postings were of particular focus of …

Online Business Reputation and Defamation Cases: Is there a Legal Remedy for Business Reputation Defamation? Part 1

HNW Business Law, Partnership Rights Litigation, Shareholder Rights Litigation

By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold, NJ Business Litigation Attorney Often landlords and tenants have problems with each other. These disputes commonly end up in court.  In the case Kinda v. Carpenter, an interesting series of events transpired.  The plaintiffs were tenants in a commercial lease. They owned a business called Artisan Fine Oriental Rug Care, Inc. (Artisan).  The defendant was their landlord. During the term of the lease, there was construction going on in and around the building by the landlord that was interfering with the Plaintiffs’ business. Eventually the tenant got a restraining order against the landlord after the landlord-tenant relationship began to sour.  They also got an order from the court …

Every NJ Shareholder is a Fiduciary to Their Fellow Shareholders

HNW Business Law, Shareholder Rights Litigation

By Fredrick P. Niemann, Esq. a NJ Shareholder Lawsuit Attorney As a shareholder of a New Jersey corporation, it is important to understand your fiduciary obligations. All shareholders throughout the state owe a reciprocal fiduciary duty to other shareholders within their corporation. This relationship is one of trust, confidence, loyalty and good faith, and is to be honored at all times. New Jersey law allows for legal action to be taken by any NJ shareholder who is the victim of a breach of fiduciary duty by their fellow shareholder. These claims arise if a shareholder, typically the majority shareholder, operates the business in a manner that is detrimental to the minority shareholders of the corporation. For example, majority shareholders cannot …

Common Stock vs. Preferred Stock: What is the Difference?

HNW Business Law, Shareholder Rights Litigation

By Fredrick P. Niemann, Esq., a NJ Shareholder Attorney  Purchasers of stock in a corporation all have shareholders rights. These rights differ depending on the corporation and what type of stock it is. There are two main types of stock, Common Stock and Preferred Stock. The type of stock a shareholder owns can have a significant impact on what rights they have as a shareholder in a NJ Corporation.  Common stock is the lowest level of stock in a corporation. The rights of common stockholders are determined by the company’s Articles of Incorporation and it’s Bylaws. Typically, these rights are less than the rights of preferred stock holders. While common stock can be a valuable asset to investors, this is …

Different Types of Ownership in NJ Corporations

HNW Business Law, Shareholder Rights Litigation

By Fredrick P. Niemann, Esq., a NJ Shareholders Attorney New Jersey corporations create funding and cash flow by offering prospective shareholders an investment opportunity with the corporation. There are different ways in which this is done, but two of the most common are through equity and debt financing. Chances are you have heard of stocks and bonds, but you may not have known these are forms of equity financing and debt financing respectively. Equity financing involves a corporation distributing stock in the corporation. When an investor purchases stock, he/she effectively purchases an ownership interest in the corporation. Each share has a value and the ownership interest in the corporation is dependent on the value of stock and amount of shares …

A SHAREHOLDER LAWSUIT CAN GET YOU MORE THAN JUST MONEY!

HNW Business Law, Shareholder Rights Litigation

By Fredrick P. Niemann, Esq. a New Jersey Shareholder Lawsuit in New Jersey Attorney If you are sued by your business partner because of alleged improper action on your part, what remedy will he or she seek? Many people assume that, when your business partner sues, it is like any other case for damages like lost profits, restoration of benefits or withdrawn funds. I have been asked to handle cases where a partner was beyond what was understood or agreed to.  But a case for economic damages may not be the best available option. In most cases, when a business partner (often a majority owner) takes excess funds from the company, the right to seek reimbursement of the funds improperly …