Business Squeeze Out
Minority Business Owners
vs.
Management Group
LexShares Investment
$500,000
Case Type
Business Squeeze Out
Jurisdiction
Private Arbitration
Case Details
This was a breach of fiduciary duty claim by a minority business owner against the management group of a family-owned business for alleged self-dealing and improper transfer of valuable rights to various third parties. The enterprise value of the business was in excess of $100 million with a complex ownership and corporate governance structure. One of the primary allegations related to a scheme to divert profits from the business directly to the defendants.
Funding Impact
Given the plaintiff's income stream and dividends from the business were in dispute, the minority owner did not have adequate liquid capital resources to pay for litigation related expenses and engage top tier legal representation. After initially and unsuccessfully litigating in a separate jurisdiction, LexShares' $500,000 litigation funding helped the plaintiff switch law firms. Retaining new counsel resulted in a strategic jurisdiction change.
Case at a glance
Law Firm
Top tier litigation boutique
Engagement Structure
Partial contingency
Plaintiff
Beneficiaries of a family trust, which was a minority shareholder of a holding company
Defendant
Executives and officers responsible for the day- to-day operations and management of the holdings company, which maintained a vertically integrated business
Case Stage at Investment Date
Pre-litigation
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