A recent Ontario Superior Court of Justice decision is a good example of how the courts can grant relief to minority shareholders of a family business where there has been unfair conduct denying reasonable expectations.
The relevant facts of Tannenbaum v. Tanjo Investments Ltd. are quite simple. There were seven shareholders in a family business. One shareholder (the Applicant in the case) owned 1/3rd of the shares. The other shareholders each owned 1/7th of the shares. The Company paid dividends equally to each shareholder regardless of the fact that the Applicant owned three times the shares of the others. The Applicant applied to court under the oppression remedy.
The Court ruled that the reasonable expectation of a shareholder is to receive dividends proportional to their holdings. As a result the company was Ordered to compensate the Applicant accordingly.
Connolly Nichols Allan & Snelling is an Ottawa law firm. We are Ottawa lawyers who regularly represent minority shareholders in family business diputes. We have succeeded in using the oppression remedy to enable our clients to assert their rights to their just entitlements time and again.
To read the full reasons in Tannenbaum v. Tanjo Investments Ltd. click here: http://www.canlii.org/en/on/onsc/doc/2009/2009canlii48526/2009canlii48526.html
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