Last week we wrote about one specific kind of shareholder oppression known as a squeeze-out. With a squeeze-out, the majority effectively removes the minority's right to benefit as a shareholder, and more or less forces that shareholder to sell its interest at a reduced price back to the majority. Although similar, today we want to discuss a different form of oppression more common to the partnership context known as a "freeze-out."
As we've written before, minority shareholder oppression can take a number of different forms and vary in its severity. Some forms of oppression simply deprive minority shareholders of certain rights they should be entitled to. More complete forms of oppression, however, may effectively remove the minority shareholder from the company altogether.
Last week we touched on the kinds of actions that generally constitute shareholder oppression in Oregon. Many of those actions constitute a claim for shareholder oppression whether the actions occur in the context of traditional corporation or an LLC. But, while the actions making up the claim are often the same, the rights and remedies you are entitled to may change depending on whether your business operates as a traditional corporation or is structured as an LLC. Today, we're going to focus on shareholder oppression in the LLC context.