On June 20, 2014, the Supreme Court, in what will certainly be seen as a landmark decision, issued an opinion reversing the Dallas Court of Appeals in the case of Ritchie v. Rupe. The Dallas Court of Appeals had affirmed the trial court’s ruling that a minority shareholder was entitled to fair market value for her shares, including discounts for lack of marketability and for the stock’s minority position. On June 20th, the Supreme Court held that it was not “oppressive conduct” for the majority shareholders to refuse to meet with prospective purchasers of the company, that the Business Organizations Code does not authorize courts to order a corporation to buy out a minority shareholder’s stock, and that there is no common-law cause of action for minority shareholder oppression. The Texas Supreme Court’s opinion represents the single most important decision to-date on the rights, or lack thereof, of minority shareholders.
More on this topic in a blog post coming soon.