There are two events that participate in a buy-sell: the trigger event and the purchase of the shares. Either both can be automatic or optional. The triggering event is usually the termination of the working relationship. In this case, either the shareholder or the company would have the opportunity to trigger the buy-sell by deciding to terminate the employment contract. The company`s ability to terminate could be limited by an employment contract. The triggering event could also be the exercise of an option by both parties without reference to employment. This would depend on whether the dismissed minority shareholder was a “key agent” whose loss harmed the company and the total abandonment of a legitimate commercial purpose – as the Supreme Court found, a very “extreme” situation and very difficult to prove. The burden of proof of a legitimate commercial purpose would likely fall on the majority shareholders/directors who made the termination decision because they owe fiduciary duties to the company. We have no known what the cure would be. If the termination decision violated trust obligations to the company, reinstatement (and repayment) to cancel the illegal transaction would of course be available, but this remedy would make the minority shareholder vulnerable to further repressive behaviour.
The Texas Business Organizations Code would allow a minority shareholder in a tightly managed company to request that the court treat the derivatives action as “direct shareholder action to the benefit of the shareholder.” This relief would be possible if the court found that “justice” requires treatment. If so, the action could be seen as a right to illegitimate termination, which would allow for the recovery of wages and compensation opportunities. In addition, the fair authority of the court could authorize a judicially ordered takeover at a fair price set by the courts. The Supreme Court has made it clear that such a discharge would be possible in accordance with Section 21.563. In other jurisdictions, there is some power that the relief of the burden on the shareholder employee to use a sales contract will result in a breach of the trust obligation. A court found a sufficient fiduciary relationship between the shareholders to justify a revaluation of the purchase price. A court ruled that the purchase price must be reasonable at the time of purchase. To Miller v. Miller, the husband founded a company and had his wife sign a shareholder contract that requires the withdrawal of their shares after the divorce. Two years after the divorce, the woman learned that society was worth much more than she thought. She complained about breaking the agreement and sharing the shares. The jury found that the agreement had a reasonable business purpose, but that it was unfair to the woman.
The court challenged the resignation. The Dallas Court of Appeal quashed the SS and stated that the controlling shareholder owed trust obligations in the repayment. Gregory G. Brown is an economic litigation lawyer in Irvine, CA. He is an experienced veteran of the jury trial, a State Board Certified Trial Specialist and a member of the American Board of Trial Advocates. As a lawyer for more than 30 years, he has spent hundreds of days as a senior counsel in jury trials across California on fraud, breach of contract, shareholder disputes, breach of trust obligation and many other issues. Brown has received numerous awards and distinctions, including Martindale-Hubbell`s highest honour, a pre-eminent AV rating, which means that his legal skills are “very high level” and that his ethics are “unquestionable.”