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Maverick
Maverick, Attorney
Category: Business Law
Satisfied Customers: 6392
Experience:  20 years of professional experience
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What are Tennessee laws that protect minority shareholder

Resolved Question:

What are Tennessee laws that protect minority shareholder?
Submitted: 7 years ago.
Category: Business Law
Expert:  Maverick replied 7 years ago.

At the link below you will find the TN law on corporations. Minority shareholder rights are interevowen throughout the code but is more based on common law. Please state your specific issue so we can assit you better.

 

http://www.michie.com/tennessee/lpext.dll?f=templates&fn=main-h.htm&cp=tncode

 

 

Customer: replied 7 years ago.
I own an insurance co with my brother & sister. We were third party admin for a health care co for 25 yrs. Due to hippa our contract was cancelled-we continue to get the residuals off the inforce policies as long as they are on the books. We began to represent 2 other co's & recruited agents. Our equal shares of stock were gifted to us over the years by our father. We had 30 plus employees during the prime of our business & down to siblings self & 1 employee- health insurance not selling well & the co's we represent have a higher premium then Blue Cross Blue Shield. Anyway I showede them on P & L that the only thing keeping us going is residuals from company we used to represnt. On of the co's we concentrate on only gave us commissions of $250.00 last month- prooving the residuals from before keep us going. We had been in the red a few months ago & we quit our paydays til we got back in the black. I was in chg of employees and mj of work at the agency while my sister did her thing. My husband was employed there until the 2 of my siblings met privatly & decided only me or my husband could work there-that is fine but they were sneaky. In June when he left my siblings were teaming up- our only employee said you know they are teaming against you- I did know this, I began having headaches, stomach problems & had to quit. Yesterday with co lawyer & acct- I proved that we were only living on residuals & we would all have more money if we closed the doors. They are removing me from the board next wk. I asked for my third of residuals less expenses of one third of ex-contract on copy machine,phone service- to only pay by third if we closed the doors. They voted yesterday to divide profit by thirds for Sept & put themselves back on salary of $5,000 a month for Oct, Nov, Dec & after each of those months to take the profit and divide it by thirds & give me one third of profit. My point it is one third of my gifted shares is going down the tubes because there is very little new income to support the agency & they want to keep trying- it has been down for a few yrs
Customer: replied 7 years ago.
I am in a family insurance business equally with my brother and sister. We met with the acct in May & we were in the RED. My husband was employed there & my brother & sister met privatly & decided my husband had to go. They were being different enough after that that our only employee said they are teaming up on you- I agreed. I began having headaches,stomach pains & heart palpitations & resigned Aug 31st. I prooved to them yesterday in a meeting with corp atty & acct that the only thing keeping the business going were residuals from a co we have not worked with in 5 yrs. We were third party admin & had 30 employees. The main company we have worked with sense then only generated$250.00 in new commissions in Aug. I want my 3rd of the residuals & agree to pay my part of sevices like contract on phone,copy machine etc. We also own bldg. They voted to split profits for Sept 3 ways . Then in Oct ,Nov, Dec to pay them their original $5,000.00 MO SALARY & SPLIT PROFITS AFTER THAT EQUAL AMONG 3 OF US. tHEY ARE taking my gifted shares= residuals over 27 yrs I was there & waste them on keeping the doors open because they can not stand to close the family business.
Expert:  Maverick replied 7 years ago.

As a minority shareholder you have very few rights. The rights you have extend to reviewing and inspecting the books and records as well as receiving dividends if the company is profitable. You can also ask the company or other shareholders to buy you out. Unfortunately, I am representing a minority shareholder right now and we are having the same types of issues and the law does not provide much leg to stand on. If you feel that they are forcing you out of the company, you may have a case for a shareholder oppression lawsuit, however, these are extremely costly and probably not worth the legal expense and time involved.

 

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