California business disputes among shareholders and/or partners can, at best, disrupt business operations and affect profit margins. At worst, they can cause a dissolution or premature sale of a company. Any business with more than one owner can come to a crossroads for a variety of reasons.
Types of Business Disputes
Some examples of shareholder and/or partner disputes include, but are not limited to:
- Diversion of assets,
- Breach of fiduciary duty,
- Breach of contract,
- Corporate liquidation,
- Minority shareholder oppression,
- Misappropriation of trade secrets,
- Corporate governance issues,
- Conflicts of distribution of assets and liabilities in a business divorce, and/or
- Usurpation of corporate opportunities.
Other common disputes include debtor-creditor violations, trademark or other intellectual property violations, insurance disputes, business succession litigation, as well as state or federal licensing/regulatory enforcement actions.
Business disputes can be resolved in several different ways, depending on the particular issues that are causing the conflict. The best way to protect yourself and your business ahead of time is to have properly drafted legal mechanisms in place such as corporate agreements, contracts, and written policies and guidelines.
The first place to look when business partners and/or shareholders get involved in a California business dispute is the governing contract. This may be a partnership, shareholder or operating agreement or some other type of document depending on the entity at issue. If the agreement outlines a solution that applies to the dispute, following the contract is the best option. If doing so does not fully resolve the dispute, there are other documents that may such as employment agreements.
Alternative Dispute Resolution
When the disputing parties are unable to come to a reasonable agreement on their own, it is not uncommon for them to seek out alternative dispute resolution (ADR) as an alternative to formal litigation in court in a hearing before a judge or in litigation proceedings. Unlike formal litigation, ADR is a informal manner in which to resolve disputes that is faster, less expensive, and confidential.
Generally, the three common methods under ADR include:
- Mediation: This involves a neutral, independent third party to act as mediator and assist the parties in working out the dispute by exploring options on how to resolve the disagreement. This option may be undertaken voluntarily by the opposing parties, by way of a court order, or through the terms of an existing contractual agreement.
- Negotiation: Typically this is an informal bargaining process in which the parties may communicate directly, or through their own lawyers, in an effort to reach an agreement on the dispute.
- Arbitration: This process requires the parties to present arguments and evidence to the arbitrator, a neutral third party, who then makes a determination on the case. Arbitration is more formal than the other methods and the parties are typically bound by the arbitrator’s decision.
California Business Dispute Help
Engaging the services of an experienced California corporate and business lawyer will likely prove valuable when facing corporate issues that may threaten your company’s operation. The skilled attorneys at Bassiri Law can guide you through this difficult process and provide the best legal options available to you and your company. Do not delay. Click here or call (949) 222-0209 or Toll Free (888) 530-2001 today to schedule your initial case evaluation.