Sher Tremonte Prevails in Critical Summary Judgment Decision in Minority Shareholder Squeeze-Out Dispute
Sher Tremonte lawyers Theresa Trzaskoma, Justin Gunnell, and Allegra Noonan recently obtained a highly favorable decision on summary judgment on behalf of their client, a one-third owner of a closely held company that is the general and controlling partner of an asset management firm with more than $10 billion AUM.
After our client was forced out of the business, his former partners attempted to dilute his interest in the company by wrongfully issuing shares to themselves at improperly low prices. When our client complained, the company sued him, arguing that, among other things, he should be compelled to tender his shares for a tiny fraction of their value and that he was violating a non-competition agreement. Sher Tremonte brought counterclaims for breach of fiduciary duty based on self-dealing and excessive compensation.
Adopting nearly all of Sher Tremonte’s arguments, Justice Gretchen Walsh of the Commercial Division of the New York State Supreme Court (Westchester County) dismissed each of the company’s claims against our client. The Court also rejected the other side’s arguments that their conduct was consistent with the shareholders’ agreement, setting up a trial on our client’s improper dilution and excessive compensation claims. Read the decision here.