Texas Supreme Court Grants Client's Petition for Review in Minority Shareholder Oppression Case
The Texas Supreme Court has granted a petition for review filed by Hawkins Parnell & Young, LLP on behalf of its client in a shareholder oppression case. The client was represented by another firm in the trial court, which rendered a judgment holding that the client committed minority shareholder oppression and awarding the plaintiff $7,000,000. The client hired HPY appellate specialist Rob Gilbreath for the appeal, and the court of appeals reversed the damages award but affirmed on liability.
In the Texas Supreme Court, the principal issues are (1) whether shareholders and principals controlling a closely held corporation oppressed a minority shareholder by refusing to meet with potential buyers of her stock; (2) whether shareholder oppression should be proved by a “reasonable expectations” standard or by “burdensome, harsh or wrongful conduct”; (3) whether the state statute addressing oppression authorizes a court to order controlling shareholders to buy the minority shareholder’s stock; and, if so, (4) whether such a stock-buyout remedy was appropriate in this case. The Texas Supreme Court has not addressed shareholder oppression since 1955, and the Court's decision in this case is likely to prove groundbreaking in a number of respects. The Court grants review in about 12% of the cases appealed to it. The case will be argued on February 26, 2013.