State statutes give certain rights to minority and dissenting shareholders. Some of these rights can be enhanced or modified by the company’s corporate documents such as the bylaws or articles.
Dissenter’s rights in Oregon are covered in ORS 60.551 to 60.594. The statute gives a shareholder the right to dissent from and obtain the fair market value of the shareholder’s shares following certain corporate acts. These acts are: Consummation of a merger; consummation of a plan of share exchange; consummation of the sale of all or substantially all assets of the company; amendment of the articles that materially affects the rights of the dissenter; and conversion of the company to a non-corporate business entity.
If a proposed corporate action, which could create dissenters’ rights, is submitted to the vote of shareholders, the statutes gives very specific requirements for giving notice to shareholders.
If the action is taken without shareholder vote, the corporation again must give a statutory notice to the shareholders regarding their dissenters’ rights.
Generally, A shareholder entitled to dissenters’ rights is not entitled to challenge the corporate action unless the action is unlawful or fraudulent with respect to the shareholder or the corporation.
Besides Dissenters’ rights, there are other potential causes of action that shareholders and the corporation must be aware of. These include minority shareholder oppression and deadlock, breach of fiduciary duty, derivative actions, and others.
If you or your business have concerns regarding shareholder rights and current or potential disputes caused by an action of a company, please contact us to discuss your options and develop a plan for moving forward.