By Kevin Price, Publisher and Editor in Chief, USDR.
From Kevin Price’s column at Huffington Post:
When it comes to the issue of “minority rights,” thoughts immediately wander to race, gender, age, or sexual preference. In the state of Texas, there is a different type of minority rights battle at stake and the war over it went all the way to the Texas Supreme Court.
Recently I interviewed Lee Kaplan on the Price of Business show. Kaplan is a prominent business litigator with the law firm of Smyser, Kaplan, and Velselka and he was on to discuss this issue. In the interview, he said that in 2014 the Texas Supreme Court, “with a decision of 6 to 3, overturned 25 years of precedent when it came to minority shareholder rights”. He called this a “surprising decision” and that the court has essentially curtailed many shareholder rights.
Because of this decision, on a very practical level, minority shareholders will need to have explicit rights and authorities in their contracts with the businesses they invest with or the presumption will be that the company itself has little responsibility to comply with the interest of those owners. He pointed out, for example, that if the management of a firm has majority ownership of that company, and they are interested in dramatically increasing their salaries, there is very little (read more)