Disputes Among Owners of Closely Held Companies
An ownership dispute can halt decision-making at a company that is otherwise sound. We represent shareholders, LLC members, and partners in disputes over control, distributions, and breach of fiduciary duty.
Serving Alabama, Georgia & South Carolina · Commercial litigation and dispute counsel
Flexible Fee Structures
Contingency · Hourly · Hybrid
Seven Days a Week
Free, confidential consultation
Three States
Alabama, Georgia & South Carolina
Contract deadlines and forums differ across the three states we serve. South Carolina gives half the time Alabama and Georgia do. Choose the state where your dispute sits for the law that applies to your company.
Six years on written contracts (Ala. Code § 6-2-34)
Partnership & Shareholder Disputes in AlabamaSix years on written contracts (O.C.G.A. § 9-3-24)
Partnership & Shareholder Disputes in GeorgiaThree years on written contracts (S.C. Code § 15-3-530)
Partnership & Shareholder Disputes in South CarolinaOwnership disputes are among the most disruptive matters a closely held company will face, because the parties on both sides are also the people who run it. Deadlocked decision-making, withheld distributions, exclusion of minority owners, and breach of fiduciary duty each carry consequences for the business itself as well as for the individuals. Our business litigation attorneys represent majority and minority owners in these disputes, through negotiation, through mediation, and in the circuit courts of Jefferson and Shelby Counties when the matter has to be tried.
When business partners, LLC members, or shareholders fall out, the consequences extend past the individuals involved to employees, clients, and the operation of the company itself. Alabama law imposes fiduciary duties on partners and controlling shareholders, and a violation of those duties gives rise to a claim for damages. We handle the full range of internal business disputes: exclusion of minority owners, disputes over distributions and compensation, oppression of minority shareholders, deadlocked LLCs, improper use of company assets, and contested buyouts. We also represent parties in dissolution proceedings where the relationship cannot be repaired.
Family-owned businesses, professional service firms, construction and contracting companies, and multi-partner industrial operations in Alabama regularly encounter ownership disputes. Preserving the business and preserving an individual owner's investment are related objectives, but they are not always the same one, and the distinction matters when deciding what relief to seek.
Few business conflicts are as disruptive as a falling-out among owners. When partners, LLC members, or shareholders no longer agree on direction, money, or control, the dispute threatens not only the relationships but the business itself, along with the livelihoods of everyone who depends on it. Understanding your rights as an owner is the first step toward protecting your investment.
This guide explains how internal ownership disputes work in Alabama, Georgia, and South Carolina, including the fiduciary duties owners owe one another and the remedies available when those duties are breached. Whether you are a minority owner being excluded or a majority owner facing a challenge, knowing the legal landscape helps you decide how to respond.
In closely held businesses, those who control the company, such as managing partners, majority shareholders, and controlling members, generally owe fiduciary duties of loyalty and care to the other owners. These duties prohibit self-dealing, diverting company opportunities, and using control to unfairly benefit insiders at the expense of others.
When those in control breach these duties, the harmed owners may have claims for damages, an accounting, and other remedies. Because the line between legitimate business judgment and a breach of duty is not always obvious, these disputes are fact-intensive and reward careful documentation of who did what and why.
Minority owners are particularly vulnerable. Those in control may attempt to freeze out a minority owner by withholding distributions, terminating employment, excluding them from decisions, or diluting their interest. The law in all three states provides recourse against this kind of oppressive conduct, but asserting it requires understanding both the governing documents and the applicable statutes.
The operating agreement, partnership agreement, or bylaws usually set the ground rules, but where those documents are silent, each state's LLC and corporate statutes supply default protections. A minority owner's leverage often lies in the combination of contractual rights and these statutory remedies.
Many ownership disputes ultimately resolve through a buyout, where one side purchases the other's interest. The contested issue is usually valuation: what the interest is actually worth, and on what terms. A valuation position grounded in the business's financials and the governing documents carries considerably more weight than one asserted without that support.
When owners are genuinely deadlocked and the business cannot function, courts have authority to fashion remedies ranging from appointing a receiver to ordering a buyout or, as a last resort, dissolving the entity. Preserving a viable business is almost always preferable to dissolution, and most disputes are resolved well short of that.
The operating agreement, partnership agreement, or bylaws define your rights on distributions, voting, transfers, and buyouts. Start there.
Records of withheld distributions, exclusion from decisions, or self-dealing are the backbone of a breach-of-fiduciary-duty claim.
Because buyouts turn on valuation, a credible and financially grounded view of what the business is worth is the foundation of any position taken.
Oppressive conduct tends to escalate. Asserting your rights early can preserve access to information and prevent irreversible harm.
The obligation of loyalty and care that controlling owners generally owe to other owners in a closely held business.
Tactics used by controlling owners to pressure or exclude a minority owner, such as withholding distributions or decision-making access.
The purchase of one owner's interest by another, frequently the practical resolution of an ownership dispute.
A situation where owners cannot agree on essential decisions, potentially leading to court-ordered remedies including dissolution.
Not without consequences. Alabama law imposes fiduciary duties in closely-held businesses that prohibit majority owners from oppressing minority interests. Freeze-outs, denial of distributions, exclusion from management, and forced dilution may all give rise to claims for damages or a court-ordered buyout at fair value.
Alabama's LLC Act and general partnership law provide default rules that govern when operating or partnership agreements are silent. Courts will apply those statutory defaults along with equitable principles. We analyze both your governing documents and applicable Alabama law to determine your rights and remedies.
Not necessarily. Courts have authority to appoint a receiver, order a buyout at fair value, or fashion other equitable remedies short of full dissolution. Where the business remains viable, those alternatives are considered first. Dissolution is generally a remedy of last resort.
A breached contract produces a measurable loss for the party that performed. We represent businesses across Alabama, Georgia, and South Carolina in breach of contract litigation, demand enforcement, and negotiated resolutions.
Some commercial disputes are resolved in negotiation. Others are tried. We represent businesses across Alabama, Georgia, and South Carolina in commercial litigation from pre-suit demand through verdict and appeal.
Partners, officers, directors, and managers owe the company duties of loyalty and care. Where a fiduciary self-deals, diverts an opportunity, or prefers their own interest, the company has a claim for the resulting loss.