When Shareholders Can't Get Along

January 13, 2019

 

 

We often are asked what alternatives business owners have when they can't get along with each other.  If the disagreements between shareholders are so serious that they can no longer work together, one strategy to break the logjam is a little used mechanism known as a 'squeeze out' merger.

 

A squeeze out  merger is a series of corporate maneuvers that results in the forced sale of the shares of minority shareholders in exchange for fair compensation.  The steps in a squeeze out merger are shown in the diagram.

 

In a squeeze out the majority shareholders form a new company and merge with the old company.  The old company shareholders (including the minority owner) is bought out and the new company (without the former minority owner) moves forward.

 

For more information about a squeeze out merger or other issues regarding the operation of your business, please contact Judith Bachman, Esq. at The Bachman Law Firm PLLC at judith@thebachmanlawfirm.com or 8456393210.

 

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