Publications
- Publications
- Contractarianism and Wrongs in Minority Oppression
Contractarianism and Wrongs in Minority Oppression
The two principal remedies in corporate law against abusive conduct toward minorities are the derivative action and the oppression action. The former allows a proper complainant to seek relief on behalf of the company while the latter provides non-controlling shareholders with various personal remedies where they establish oppressive conduct. The courts have recently proposed a distinction between an “essentially corporate wrong” (which members may purportedly only rectify under the derivative action) and a “personal wrong” (which is purportedly the only valid basis for the oppression action). It is suggested that focusing on the nature of the wrong is untenable given commercial realities that a wrong to a company can also readily prejudice members’ rights. Instead, the emphasis should be on the agreement or understanding of the parties and the specific reliefs being sought.
