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Weil v. Express Container Corporation

360 N.J. Super. 599, 824 A.2d 174 (App. Div. 2003)

CORPORATIONS; SHAREHOLDERS; OPPRESSION—New Jersey’s oppressed shareholder’s statute does not include a remedy for shareholders after the corporation is dissolved.

In this case, a minority shareholder sought remedies against a majority shareholder, individually, after a corporation was dissolved in bankruptcy. The Chancery Division granted summary judgment in the majority shareholder’s favor and the Appellate Division affirmed. It found that the oppressed minority shareholder statute does not include a remedy for oppressed minority shareholders after a corporation is dissolved. The statute contemplates that there be a continuing business or a successor entity. Further, the Court refused to expand the statute to include a remedy against the majority shareholder personally. It also rejected the minority shareholder’s claim of breach of fiduciary duty based on the allegations that her distributions were reduced and then eliminated. The Court noted that in order to prevail in a personal action, as opposed to a derivative action, she would have had to demonstrate that the alleged damages were particular to her and not common to all of the shareholders. Here, the Court found that the distributions to her were no different from what other shareholders received. Since all of the distributions to shareholders were reduced and eventually terminated, she had no injury that was particular to her.

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