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Breach of Fiduciary Duty and Shareholder Oppression

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The business world is fraught with potential dangers, and sometimes, nothing is more threatening to business health than betrayal from within. Fiduciary duty is the tie that binds partners, officers, directors, and management to irrevocable fidelity to the company’s best interests. However, there are many situations that arise in which a these individuals act without approval of the majority of the shareholders or company management, causing significant harm to the company and its owners. This is classically known as a Breach of Fiduciary Duty, and when the majority owner acts to squeeze the minority owner it is known as Shareholder Oppression. It is only in the capable hands of a skilled lawyer that this breach can be remedied.

Attorney Ashish Mahendru is such a lawyer. His firm, Mahendru PC, based in Houston, Texas, has recently successfully handled potentially devastating cases in which minority shareholders had taken liberties with either the financial affairs of the company or personnel decisions, leaving the company vulnerable to irreparable harm. A recent case of Breach of Fiduciary Duty, which involved one shareholder withdrawing funds from a bank account without written authorization of the other co-equal shareholder. With close to $150,000 wiped out of the bank account, there is little hope of recovering the funds from the breaching partner if one does not act with lightning speed. Attorney Mahendru quickly and skillfully filed injunctions to freeze those assets—a move which swiftly protected the company from further losses and potential bankruptcy. The money was traced to an individual bank account, and both the bank and the bad acting partner were forced to place the money under the watchful eye of the court until the fundamental dispute between the parties is resolved.

Another recent situation involving bad acts by a partner was a case in Houston, Texas in which a minority shareholder physically restricted and removed from employment a long-standing member of the company, and did so without the prior consent of the majority shareholder. As a minority shareholder, one does not have the authority to make and implement decisions that affect the goodwill, reputation, credit worthiness or financial health of the company without the express written authorization of the majority. Within twenty hours of the partner being locked out, Ashish Mahendru filed injunctions to restrict access to all the company’s assets and paperwork from the bad acting partner, which allowed the locked out partner access back to the company and its business operations. The speed of reacting to the bad partner’s conduct and the injunction forced the matter to speedily settle without any further damage to the company’s financial health. Ultimately, that is a savings in attorney’s fees and expenses for the affected partner, because the longer the matter drags on the fees and expenses tend to grow.

It is vital for one act quickly in cases such as these. If you suspect fiduciary misconduct, contact Attorney Ashish Mahendru, who has the experience and knowledge to file the injunctions necessary to prevent any further damage to the health and interests of your company. Call the firm toll free at 866-558-8149 or 713-391-8247 to discuss your needs. Acting now could save your business.

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