Business Newsletters

Remedies for Dissenting Shareholders and the Deadlocked Corporation

Dissenting shareholders in a publicly-traded corporation may sell or otherwise dispose of their shares and seek as damages any lessening of value of the shares prior to the sale resulting from the matter causing the dissension. However, shareholders in a closely held corporation may not have a reasonable way to dispose of their shares and avoid dissension. Deadlocks among shareholders or directors of closely held corporations thus may result more often in litigation than such conflicts within publicly held corporations.

Corporate Criminal Liability

Corporations were not initially held criminally responsible for corporate activities. A corporation was considered to be a legally fictitious entity, incapable of forming the mens rea necessary to commit a criminal act. The Supreme Court ultimately rejected this notion in 1909 in New York Central & Hudson River Railroad v. U.S. A railroad company employee paid rebates to shippers in violation of federal law. The court upheld the corporation's criminal conviction, finding no reason that corporations could not be held "responsible for and charged with the knowledge and purposes of their agents, acting within the authority conferred upon them." The Supreme Court concluded that criminal liability could be imputed to the corporation based on the benefit it received as a result of the criminal acts of its agents. The case and its progeny have essentially imported the doctrine of respondeat superior from tort law into the corporate criminal realm. A corporation may be convicted for its agent's unlawful acts when the agent acted within the scope of his or her actual or apparent authority. Another theory of corporate criminal liability is the "collective knowledge doctrine." As knowledge of criminal activity is often the scienter element of a particular crime, the requisite knowledge can be imputed to the corporation based on the collective knowledge of the directors and officers.

Business & Corporate Entities: Corporations

Professional Corporation Basics

Business & Corporate Entities> Corporations> Shareholders & Other Constituents> Meetings & Voting

(Preparations for the Annual Shareholder Meeting)

Tortious Interference with a Contract or with Prospective Contractual Relations

Parties to a contract are entitled to performance of the contract without interference from others. Interference with a contract can lead to claims of tortious interference with performance of the contract or tortious interference with prospective contractual relations.