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The legal community has criticized the present rules with regard to freeze-out mergers as being biased against the interests of the minority shareholders. For example, if a gain in stock value is anticipated by the majority, they can deprive the frozen-out minority of its share of those gains. [4]
Shareholder oppression occurs when the majority shareholders in a corporation take action that unfairly prejudices the minority. It most commonly occurs in non-publicly traded companies, because the lack of a public market for shares leaves minority shareholders particularly vulnerable, since minority shareholders cannot escape mistreatment by selling their stock and exiting the corporation. [1]
Drag-along right (DAR) is a concept in corporate law, often encountered in the context of venture capital and private equity.. Under the concept, if the majority shareholder(s) of an entity sells their stake, the prospective owner(s) have the right to force the remaining minority shareholders to join the deal.
As mark-to-market institutions, big banks can often experience wild changes in asset values as financial markets gyrate. These swings in value are recorded as "other comprehensive income" and ...
The U.S. Treasury is expected to complete another sale of AIG (NYS: AIG) stock in the coming weeks, leaving the government with a minority stake of less than 20% for the first time since it ...
A "drag-along" will be observed where a majority shareholder will oblige minority shareholders to sell their shares at the same time to a third party; the latter are dragged in to the sale of shares of the former. [2] For example, say Abe owns 55% of Widgets Inc., and wants to sell his shares to Bill for $55. Chuck owns 2 shares of Widgets Inc.
The Companies Act 2006 in the United Kingdom gives minority shareholders certain rights. Minority shareholder protections in United States corporate law may amount to a blocking minority. Voting in the Council of the European Union uses 'qualified majority voting', which means that a significant minority of countries and populations may block a ...
In corporate law in Commonwealth countries, an oppression remedy is a statutory right available to oppressed shareholders.It empowers the shareholders to bring an action against the corporation in which they own shares when the conduct of the company has an effect that is oppressive, unfairly prejudicial, or unfairly disregards the interests of a shareholder.