This is the second article of a three-part series discussing the Michigan Court of Appeals decision in Young v Vandermeer, Docket No. 349093. In this case, Plaintiff submitted nine claims against Defendants after their business partnership soured. This article will discuss the Court’s ruling on the shareholder oppression claim.
Plaintiff brought a shareholder oppression against her former business partner, the defendant. Each owned 50% of the business. The trial court dismissed the claim because Plaintiff was not a minority shareholder and therefore unable to sue for violation of MCL 450.1489 of the Business Corporation Act.
The Court of Appeals reversed this decision based on the language of the statute. MCL 450.1489 does not contain the word “minority,” but has frequently been described by courts as allowing for actions by “minority shareholders” to protect them from the oppressive conduct of “controlling” persons. Plaintiff alleged that Defendant was actually in control of the company although ownership was equally split. Because it is not necessary for Plaintiff to be a minority shareholder in terms of percentage of ownership, Plaintiff’s claim was reinstated.
The key takeaway from the Court’s decision on this claim is that under MCL 450.1489, commonly referred to as the minority shareholder oppression statute, the claimant does not actually need to be a minority shareholder. Any shareholder who is oppressed by a “controlling” shareholder has standing to bring forward a claim based on this statute.
The full text of the opinion can be found at: https://casetext.com/case/young-v-vandermeer
