When to settle a shareholder dispute
Shareholder disputes are expensive because the business keeps running while the owners fight. A framework for deciding early.
Unlike most commercial disputes, a fight between owners happens inside the business it concerns. Customers notice, staff leave, and the value everyone is arguing over shrinks.
Questions to answer in the first month
- What do the shareholder agreement and bylaws actually provide for deadlock or exit?
- Is there a buyer for either side’s stake at a price both could accept?
- What does the business lose for each quarter the dispute continues?
If the honest answers point to a buy-out, the sooner valuation starts the better. Litigation can still be the right path, but it should be a decision, not a default.
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