Frozen Out: When You Are Being Squeezed Out of Your Own Business

Many minority shareholders come to Hunt & Hunt because they feel they are being pushed aside in a business they helped create.

Understanding Oppression in a Company Setting

Oppression is not just about decisions you do not like. The law requires something more serious: conduct that is unfair, prejudicial, or lacking in honest dealing, even if it does not break any specific law.

Typical examples include:

• being shut out of the company’s operations or decisionmaking
• being denied access to information you are entitled to as a shareholder
• watching business opportunities be diverted to another person or entity instead of the company

These behaviours can undermine your rights and the value of your investment.

What the Court Can Do About It

If a court decides oppression has occurred, it has broad powers to fix the situation. Two of the most common outcomes are:

1. Ordering a Buy-Out

The majority shareholders may be required to purchase your shares. Importantly, the valuation is based on what your shares should have been worth if the oppressive conduct had not taken place.

2. Winding Up the Company

This is the nuclear option — used only when no other remedy is suitable. If the company’s affairs are so compromised that it cannot operate fairly, the court can order it to be wound up.

What You Will Need to Prove

A successful oppression claim usually turns on two key elements:

1. Evidence of Unfair Conduct

The stronger and more detailed your evidence, the better your prospects. Emails, board papers, financial records, and communication history can all be crucial.

2. The True Value of Your Shares

Share valuation is often the most contested part of these disputes. Independent expert evidence is essential to establish what your shares are genuinely worth.

The Bottom Line

Companies must treat all shareholders fairly — including those without control. When they do not, the consequences can be significant.

If you are a minority shareholder who feels sidelined or mistreated, you do not have to navigate the situation alone. Catherine Ballantyne, Principal of Hunt & Hunt, has extensive experience in shareholder oppression matters and can help you understand your options.

If you would like further information please contact Catherine Ballantyne, Principal, Hunt & Hunt at [email protected] or +61 3 8602 9200.