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Shareholder Disputes

Are you a shareholder in a corporation, but believe your rights are not being honored by the other shareholders, officers, or directors? Were false statements made to you before you invested? What can you do? What does Texas law provide?

Shareholder litigation has a rich history in Texas, evolving significantly over time as the state's economy has grown and as business law has progressed. This brief history outlines some of the most significant developments. 

Pre-1900s: Early Texas law did not recognize shareholders as separate from the corporation, so there was little room for shareholder litigation. Businesses were small, and litigation was more of a last resort.

Early 1900s: As corporations grew in size and complexity, laws began to evolve to protect shareholder interests. Still, shareholder litigation was quite rare and was generally limited to instances of outright fraud or misconduct.

Mid-20th Century: This period saw a dramatic increase in shareholder litigation, sparked by a number of high-profile cases in the 1950s and 1960s. This led to a better understanding of shareholders' rights and obligations, and established the concept of derivative suits, where shareholders could sue on behalf of the corporation.

Late 20th Century: This was a time of significant litigation, much of it driven by a boom in the Texas oil and tech sectors. Shareholder class action lawsuits became more common during this time. Legislation and case law also evolved to further define and refine the roles and responsibilities of shareholders, directors, and officers, leading to an increase in suits regarding breaches of fiduciary duty.

Early 21st Century: The first two decades of the 21st century saw significant changes in the landscape of shareholder litigation. The Sarbanes-Oxley Act (2002) and the Dodd-Frank Act (2010), both federal legislations, set new standards for corporate governance and transparency, leading to an uptick in litigation related to these issues.

Recent Years (up to 2023): Shareholder litigation in Texas has continued to evolve with changing business practices and emerging technologies. Challenges related to digital privacy, cybersecurity, and COVID-19 pandemic have been at the forefront. While shareholder derivative suits and class action suits continue to be prominent, Texas courts are also witnessing novel forms of shareholder litigation related to ESG (Environmental, Social, and Governance) concerns.

Texas’s history of shareholder litigation is characterized by an ongoing evolution of legal principles, changing business landscapes, and emerging challenges.

When it counts enough to be in court, you need a lawyer who is experienced, tenacious, dependable, and who will fight for you and your company.

The firm has more than 25 years of experience representing people and businesses in lawsuits. If you think you have a dispute with the corporation you invested in, or a dispute with your other shareholders, officers, or directors, we may be able to help. Give us a call to schedule an appointment. The firm only represents clients based upon a signed, written agreement. In some circumstances, we offer a free, no obligation, initial, in-office consultation.

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