Liquidating distribution for partnership
Part IV explains why it is important to draw that distinction early in any litigation. Part V examines and critiques Minnesota’s current approach to the direct/derivative analysis. In ordinary circumstances, “[w]hether or not a corporation shall seek to enforce in the courts a cause of action for damages is, like other business questions, ordinarily a matter of internal management and is left to the discretion of the directors.” A derivative lawsuit, therefore, necessarily impugns the management of the corporation and inevitably involves two distinct fights. 2 substituting “a corporation that is not a publicly held corporation” for “a closely held corporation”); 1994 Minn. For cases invoking Minnesota Statutes s 302A.751, see Mc Callum v. One fight concerns the underlying transaction or conduct, which is alleged to have caused some harm or breached some duty to the corporation. 1 by deleting action relating to unfairly prejudicial acts from clause 2 and adding clause 3 regarding actions relating solely to unfairly prejudicial acts toward shareholders); 1994 Minn. Rosen’s Diversified, Inc., 41 F.3d 1239, 1241 (8th Cir. Once your search results come up, you can narrow your search by court, case, judge or year — and you can flip between court document, docket entry, or case name results.
The shareholder has suffered harm only indirectly, as a consequence of damage done to the corporation. The statute provides that, “[i]f the court finds that a party to a proceeding brought under this section has acted arbitrarily, vexatiously, or otherwise not in good faith, it may in its discretion award reasonable expenses, including attorneys’ fees and disbursements, to any of the other parties.” B. Derivative Claims In contrast, a shareholder asserts a derivative claim to vindicate the rights of the corporation. There are both case law and statutory sources for direct claims in Minnesota close corporations.
Minnesota courts have stated that Minnesota law “imposes on each [shareholder in a close corporation] the highest standard of integrity in their dealings with each other.” for example, a minority shareholder in a close corporation brought a direct action alleging that the majority shareholder had used intimidating and abusive tactics to coerce the minority shareholder into transferring stock to the majority shareholder and then into resigning. (2) the directors or those in control of the corporation have acted fraudulently or illegally toward one or more shareholders in their capacities as shareholders or directors, or as officers or employees of a closely held corporation; [or] (3) the directors or those in control of the corporation have acted in a manner unfairly prejudicial toward one or more shareholders in their capacities as shareholders or directors of a corporation that is not a publicly held corporation, or as officers or employees of a closely held corporation. The plaintiff’s allegations suggested that the directors had acted with a conflict of interest. reflects another aspect of the duty of loyalty– the corporate opportunity doctrine. 3 by inserting reference to equitable relief and buy-outs); 1983 Minn.