Shareholder Disputes, Oppression Remedy, and Liability of Directors and Officers

David Alderson, LL.B, LL.M (Commercial and Corporate), Lawyer, Qualified Arbitrator and MediatorArbitration, Business Law, Business Litigation, Commercial, Commercial Arbitration, Commercial List Matters, Commercial Litigation, Corporate Litigation, Directors' and Officers' Liability, Family Business Disputes, Partnership Dispute, Partnerships and Shareholder Disputes, Professions, Shareholder Disputes1 Comment

Our lawyers have acted in Ontario and other jurisdictions for small, mid-sized and large Ontario and Canadian corporations, shareholders, directors, officers, executives and creditors in corporate disputes and shareholder disputes. We have acted in both oppression remedy action and derivative actions.

Oppression Remedy

The oppression remedy is a mechanism in the Ontario Business Corporations Act and the Canada Business Corporations Act to protect the interests of shareholders and stakeholders in a corporation against wrongful conduct.  Whether the Ontario or Canada Act will apply depends on the jurisdiction in which the corporation was incorporated.

The oppression remedy can be used to protect the interests of shareholders, directors, officers or creditors against the acts of other shareholders, the board of directors or other affiliates of the corporation.

The oppression remedy can be used to protect the interests of shareholders, directors, officers or creditors against the acts of other shareholders, the board of directors or other affiliates of the corporation. When any act or omission of the corporation or any of its affiliates effects or threatens to effect a result; the business or affairs of the corporation or any of its affiliates are, have been or are threatened to be carried on or conducted in a manner; or the powers of the directors of the corporation or any of its affiliates are, have been or are threatened to be exercised in a manner that is oppressive or unfairly prejudicial to or that unfairly disregards the interests of any security holder, creditor, director or officer of the corporation, the court may make an order to rectify the matters complained of.

See our webpage on Oppression Remedy for minority shareholders.

Directors and Officers Liability

Directors and officers of companies are expected to exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.

This duty of care is codified in the Ontario Business Corporations Act which applies to corporations incorporated in Ontario, and the Canada Business Corporation Act for Federally incorporated corporations.

The Courts have developed the “business judgment rule”, which provides that a director or officer will generally not be liable where the process used by the director or officer in reaching a decision was either rational or employed in a good faith effort to advance corporate interests.

See our webpage on Directors and Officers Liability and Fiduciary Duties.

Please contact Gilbertson Davis LLP to request an initial consultation.


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About the Author

David Alderson, LL.B, LL.M (Commercial and Corporate), Lawyer, Qualified Arbitrator and Mediator

David Alderson, LL.B, LL.M (Commercial and Corporate), Lawyer, Qualified Arbitrator and Mediator, has practiced over 40 years as a commercial and business litigator in diverse matters in the courts and in domestic and international arbitration proceedings in Ontario, England & Wales, Bermuda and Dubai. David is also admitted in New York. He is a qualified, experienced and independent arbitrator. The ADR Institute of Canada has accredited David as a Qualified Arbitrator. He accepts appointment as a sole arbitrator and as a panel member in a panel arbitration concerning business, commercial, commercial leasing, commercial rent renewal disputes, condo, contract, construction, distribution, employment, events cancellation, franchise, joint venture, marine, oppression remedy, partnership, procurement, real estate, reinsurance, sale of good, sale of business, technology and transportation disputes. David also offers practice management arbitration of procedural disputes in the courts. He is an experienced commercial mediator. Bio | Lawyer | Arbitrator | Mediator | Contact

One Comment on “Shareholder Disputes, Oppression Remedy, and Liability of Directors and Officers”

  1. We would like to meet with a lawyer to discuss options.
    We have a family business. Run by two brothers.
    The brothers opened up three corporations, one operating a trucking company, second one a invoicing branch and third branch is the investment holding Corp.
    The investment holding Corp, opened under one wife, was purchased by the two brothers, and collected mortgage from the trucking company as well as from tenants in the units. No actual expense other than the basic stuff related to building.
    The invoicing company, opened under the wife’s daughter, took all the work orders from drivers, entered into system and sent out invoices to the clients for payments. No actual office expense as this is just money collection and tracking the orders.
    The trucking company, opened under the elder brother, ran the fleet to complete workorders received each day. Paid all drivers, covered all expenses. Etc
    The younger brothers wife, daughter and son.
    Have been taking money from all accounts. Not disclosing any documentation. Not providing any statements of accounts . She has threatened to lock them out of the building units.
    She was the office manger who did everything
    She had access to all the accounts. She dealt with the accountant. She wants a divorce.
    What can the brothers do to get their building back. To get full disclosure of all the company documentation and explanations
    Plus have their questions n concerns answered to
    We would like to meet to further discuss this problem
    Please contact us in the morning.

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