Best Business Attorneys in Florence, AL

Minority Oppression in Limited Liability Companies: The Birth of a New Claim or a Hole in the Law? Minority shareholders in closely-held corporations can file a claim for corporate oppression and squeeze out against abusive majority shareholders to remedy these actions. In Alabama, however, no clear legal precedent can be found, neither statutory nor common law, authorizing minority members of a limited liability company (LLC) to pursue an oppression claim under Alabama law. Alabama caselaw discussing oppression in LL Cs is non-existent, which the Alabama Supreme Court alluded to in DGB, LLC v. Hinds. 1 Caselaw addressing LLC member disputes where oppression might have been raised is scarce. Alabama trial courts are left considering competing arguments in different cases involving oppression in LL Cs, which has and will continue to lead to inconsistent rulings throughout the state at the trial level. This article discusses many of the arguments for and against the recognition of an oppression claim in the LLC context, taking into consideration standing precedent in closely-held corporation oppression cases.