Louisiana Shareholder Law Survey
Right to Inspect Books and Records
Louisiana shareholders must give five days written notice in a signed demand to inspect corporate records and accounts. La. Stat. Ann. § 1-1602(A) (West 2016). The shareholder must be a shareholder of record for at least six months and own least 5% of the outstanding shares. Id. § 1-1602(C). The shareholder's inspection demand must be "in good faith and for a proper purpose.” Id. § 1-1602(D).
The court can limit a shareholder request to inspect records if it finds that the shareholder is attempting a “fishing expedition.” Feil v. Greater Lakeside Corp., 31 So.3d 520, 525 (5th Cir. Jan. 26, 2010). However, the court can expand or limit the right to inspect depending on the situation. Id.
In Louisiana, "[i]f a corporation engages in oppression of a shareholder, the shareholder may withdraw from the corporation and require the corporation to buy all of the shareholder's shares at their fair value." La. Stat. Ann. § 1-1435(A). Oppression occurs when the corporation's fails to deal "fairly and in good faith with the shareholder" over a period of time. See id. § 1-1435(B). To do determine fairness and good faith, the court assesses the oppressed shareholder's conduct as well as "the treatment that a reasonable shareholder would conducer fair under the circumstances, considering the reasonable exctations of all shareholders in the corporation." Id.
Louisiana directors must "act in good faith and in a manner the director reasonably believes to be in the best interests of the corporation." Id. § 1-830. Officers and directors owe a fiduciary duty to "the corporation and its members." Id. § 12:226.
The shareholder must be an owner at the time of the act complained of and must "fairly and adequately represent the interests of the corporation in eforcing the right of the corporation . . . ." La. Stat. Ann. § 1-741 (West 2015). In addition, before commencing any proceeding, the shareholder must serve written demand on the corporation to "take suitable action" and give the corporation 90 days to respond, unless "irreparable injury to the corporation" would result by waiting this time period. Id. § 1-742.