Slapping a Board

So my new assignment has me interviewing attorneys, which has been exceptionally enlightening. Let me tell you briefly about one thing that I learned so far in this process.

I learned that under Pennsylvania law, Shareholders can directly sue the corporation. Minority Shareholders, even....can sue the corporation for not providing access to its financial information (hmm--I wonder if not telling the shareholders about government investigations of its tax reporting counts here), for allowing and engaging in self-dealing (you know, the kind where the Board annually issues its LARGEST expense contract to a voting officer of the Board--without a written contract or even a bid), and/or for destroying the value of the shareholder's investment.

Yep, you see that correctly: MINORITY SHAREHOLDERS CAN DIRECTLY SUE THE CORPORATION.

And the remedies can range from judicial assignment of an entity to "supervise" the Board/Corporation or even to dissolution of the corporation. Most PA cases, however, end in buyout of the shareholder's investment.

You know what this means don't you? This means that a single shareholder in the PA Chautauqua corporation can directly sue that pitiful excuse of an HOA.

Just fucking fascinating, don't you think?

Oh, now, I know that the grand-poopah solicitor will likely try to reassure you that it can't or won't happen. But I would not get all greasy-eyed yet. Make sure he tells you that the case law supports that a minority shareholder holding less than 5% of shares can directly sue the corporation, and that the legislature intended the applicable definitions to be determined on a case-by-case basis (like pornography--the court will know it when it sees it). god forbid that that day comes when your solicitor has to backtrack and then explain how it is indeed possible for one shareholder's suit to survive to trial...and win.

Now see, if a Board doesn't like that a shareholder is asking you to show him the financial information that he needs to determine the value of his investment--or to determine the value of the buyer-of-his-investment's investment, or if you don't like that a shareholder asks for this information or that she asks for you--Board, to do your fucking fiduciary duties, without a smile on her face, well then you need to take some time to come to grips with yourself and put those big, big, big girl and boy pants on and either bow out, or act like the observant christians that you profess to be--or at least act like a person that cares about the minority shareholders and their investments.

That whole thing about getting more with honey goes both ways...except, of course, when the honey is forced up the shareholder's ass.