Alaska Shareholder Law Survey
What follows is a brief survey of Alaska shareholder law with a focus on minority shareholder rights and relief when those rights have been ignored or violated.
Hopkins Centrich is Greater Houston’s premier firm for shareholder oppression matters. Over the decades we have provided cutting edge, high quality, creative legal solutions for minority shareholders in Texas closely held corporations when the majority owners have abused their rights. We have also worked with clients in law firms across the country in all manner of cases where the rights of minority shareholders have been impinged on and they have suffered loss – economic, intellectual property, goodwill, and more.
Alaska is a Statutory State
Statutory states have adopted specific statutes governing minority shareholder oppression claims in corporations. Key characteristics of statutory states regarding shareholder oppression include:
Oppression statute - The state legislature has enacted a statute expressly addressing shareholder oppression causes of action.
Statutory remedies - The law provides statutory remedies for oppression, such as dissolution or a forced buyout of the minority's shares.
Here are some key aspects of minority shareholder oppression claims under Alaska statute (AS 10.06.628):
Standing - The plaintiff must be a shareholder at the time of the alleged wrongful conduct to have standing.
Pleading Requirements - The complaint should set forth facts constituting the alleged oppression in a direct, not derivative, lawsuit.
Grounds - The minority shareholder must allege conduct that was fraudulent, illegal, oppressive, or unfairly prejudicial.
Demand - The plaintiff should allege any demand made on the corporation and whether it was wrongfully refused.
Defendants - Individual directors, officers, and/or the controlling shareholders may be named as defendants.
Remedies Sought - The complaint should request remedies such as damages, dissolution, or a court-ordered buyout.
Evidentiary Support - Documentary evidence and sworn affidavits supporting the allegations of oppression should accompany complaint.
Legal Representation - Obtaining experienced corporate counsel to prepare and argue the oppression action is highly advisable.
Filing Location - The complaint must be filed in the Alaska Superior Court in the judicial district where the corporation's principal office is located.
Service - Each defendant must be properly served with a summons and copy of the complaint after filing.
Key Things to Remember in Alaska Shareholder Oppression Matters
There are several key aspects to shareholder actions under Alaska law that must be considered:
Statutory Basis - Alaska has adopted a specific shareholder oppression statute, AS 10.06.628, providing a cause of action.
Standing - The plaintiff must have been a shareholder at the time of the alleged oppressive conduct.
Grounds - Conduct that is fraudulent, illegal, oppressive or unfairly prejudicial toward minority shareholders.
Direct Suit - Oppression claims must be brought directly, not derivatively.
Demand Requirement - The shareholder must allege any pre-suit demand made to the corporation.
Defendants - Directors, officers, and controlling shareholders can be named as defendants.
Remedies - Remedies include damages, dissolution, appointment of a receiver or custodian, or a court-ordered buyout.
Burden of Proof - The minority shareholder has the burden to prove oppression by clear and convincing evidence.
Attorney’s Fees - Reasonable attorney’s fees may be awarded to a successful plaintiff.
Close Corporation Focus - The law focuses on protecting minority shareholders in close corporations.
Hopkins Centrich, Your Shareholder Oppression Law Firm For Fraud and Misrepresentation Claims
Hopkins Centrich PLLC provides cutting edge, high quality, creative legal solutions for minority shareholders in Texas closely held corporations when their rights have been abused by the majority owners. Our attorneys and staff have decades of experience in virtually every aspect of business law in The Woodlands and Texas. We have designed and incorporated businesses, managed their every legal concern, engaged in litigation on their behalf, aided with mergers and acquisitions, as well as having managed mergers, acquisitions, and sales.
Hopkins Centrich knows Texas business law. We are uniquely positioned to help shareholders when they have amble cause to believe their rights are being violated. When we work with a client, our sole focus is on them. We take advantage of everything technology has to offer in order to optimize how we work. That gives us more time to spend with clients, more time to understand the issues, more time to negotiate and prepare for trial. We get that no one wants to contact a law firm unless they feel they absolutely must. When they do, it almost always means that ‘things have reached a head.’
The attorneys and staff of Hopkins Centrich understand what you are going through. We will make the process understandable; you will know what is happening with your case every step of the way and you will never have to track us down for answers.
Have You Experienced Minority Shareholder Oppression?
Minority Shareholder Oppression occurs when the majority shareholders act with prejudice, unfairness, and lack of probity towards the minority thereby frustrating their reasonable expectations as owners.
Here is a concise but by no means exhaustive rundown of some of the main grounds that could support a shareholder oppression claim under Alaska statute (AS 10.06.628):
Fraudulent conduct - Misrepresentation, false statements, deception, or nondisclosure of material facts by the majority towards the minority.
Illegal conduct - Violating laws, regulations, bylaws, or legal obligations to benefit the majority shareholders.
Misapplication of assets - Wasting, mismanaging, or improperly distributing corporate assets.
Conflicts of interest - Self-dealing transactions or activities by the majority involving conflicts of interest.
Unequal treatment - Discriminatory application of corporate policies and rules between majority and minority shareholders.
Breach of fiduciary duty - Actions by the majority shareholders in breach of their fiduciary duties owed to the minority.
Lack of proper business purpose - Taking actions lack a valid business purpose and only serve the interests of the controlling shareholders.
Withholding information - Failing to provide minority shareholders with requested corporate documents, records, or information.
Preventing share transfers - Unreasonably blocking share transfers by the minority shareholders.
Amending bylaws - Amending the corporate bylaws to reduce minority shareholder rights.
Squeeze-out techniques - Tactics to pressure or coerce the minority shareholders to sell or relinquish their shares.
If any of this applies to you, please contact us as soon as possible.
