Partnership & Shareholder Disputes

The disputes that do the most damage to a closely held company are usually internal. When co-owners fall out, the fight is not with an outsider who can be pushed away; it is with a partner who holds a stake, knows the business intimately, and often shares control of its bank accounts and its future. These matters are as much about the relationship and the leverage as about the legal claims, and handling them well requires understanding both. Our job is to protect your position, whether you hold the majority, the minority, or an equal share, and to reach a resolution that lets the business survive if it should, or lets you exit fairly if it should not.

The disputes we handle

• Breaches of the operating agreement or shareholder agreement
• Deadlock between owners who each hold enough control to block the other
• Freeze-outs and the oppression of a minority owner by those in control
• Disputes over distributions, compensation, and the diversion of company opportunities
• Breach of fiduciary duty by a managing member, officer, or controlling owner
• Buyouts, valuation fights, and negotiated separations of the ownership group

Minority oppression in Michigan

Michigan is one of the states that gives a minority owner meaningful protection when those in control abuse their power. Under Michigan's limited liability company and corporation statutes, a member or shareholder who is being oppressed, frozen out of the business, denied distributions while the majority pays itself, stripped of a role, or otherwise treated in a way that is willfully unfair and oppressive, can bring a claim and ask a court for relief. Our guide on minority shareholder oppression in Michigan walks through the full remedy in detail. The remedies are broad. A court can order a buyout of the oppressed owner's interest at fair value, order distributions, or in extreme cases dissolve the company. Understanding the reach of these remedies changes the leverage on both sides of the dispute.

If you are the minority owner

The classic freeze-out follows a pattern: the controlling owners cut off your access to information, remove you from management, stop your distributions or salary while continuing their own, and wait for you to give up and sell cheap. The law does not require you to accept that. A well-timed claim for oppression, or a credible threat of one, often forces a fair buyout without a trial, because the majority does not want a court examining how it has run the company. We help you document what is happening and press for the exit or the relief you are owed.

If you are the controlling owner

Control is not a license, and majority owners are the ones most exposed to an oppression claim precisely because they run the company. The decisions that feel like ordinary management, setting compensation, retaining earnings, restructuring roles, can look very different when a minority owner casts them as a freeze-out. We advise controlling owners on how to exercise their authority legitimately, how to make a fair buyout offer that forecloses a claim, and how to defend against an oppression suit when one is filed.

Deadlock

When two owners each hold enough control to stop the other, a serious disagreement can freeze the company entirely. Nothing gets decided, the business drifts, and the value both owners built starts to erode. Some deadlocks can be broken by the mechanisms a well-drafted operating agreement anticipated, a buy-sell provision, a mediation requirement, a tie-breaking procedure. Where the agreement is silent, Michigan law provides paths, including judicial dissolution, but those are blunt instruments. We work to engineer a resolution, a buyout or a separation, before the deadlock destroys what the owners are fighting over.

The operating agreement is the first place we look

Almost every ownership dispute begins with the document that governs the relationship: the operating agreement of an LLC or the shareholder agreement and bylaws of a corporation. It defines the owners' rights, the rules for distributions and management, and, crucially, what happens when someone wants out or when the owners disagree. When a co-owner ignores those rules, our guide on what to do when a partner breaches the operating agreement lays out the first steps. A strong agreement resolves many disputes on its own terms. A weak or missing one leaves the parties to fight under the statute's defaults. Either way, reading that document closely is the first step in every matter we take, and drafting it well, through our contracts practice, is the best way to avoid the fight entirely.