Shareholder and post-acquisition disputes

Q: What are the main causes of shareholder or governance conflicts?

Shareholder conflicts often arise from strategic disagreements about the company’s management or direction, or from personal tensions that disrupt the company’s day‑to‑day functioning. They may also result from breaches of the articles of association or a shareholders’ agreement, particularly where majority rules, meeting procedures or voting arrangements are not followed. Finally, conflicts frequently occur during exclusion procedures, especially when the forced exit of a shareholder is contested.

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Preventing and Resolving Shareholder Conflicts and Post‑Acquisition Disputes

Shareholder conflicts and post‑acquisition disputes are among common sources of business litigation. If not handled properly, these disagreements can weaken the company, disrupt its governance, and generate significant financial and human ressource costs.

What is a shareholder conflict?

A shareholder conflict arises when the shareholders of a company can no longer agree on strategy, management, or the distribution of profits. These tensions can escalate and may result in a deadlock within the company.

Shareholder conflicts often result from strategic disagreements, personal disagreements between shareholders affecting the company’s day‑to‑day functioning, breaches of the articles of association or a shareholders’ agreement, or disputes concerning the exclusion of a shareholder.

Examples of shareholder conflicts:

two shareholders disagree on the company’s international expansion
a minority shareholder is excluded from strategic decisions
a minority shareholder blocks important decisions affecting the company’s development
a former shareholder challenges their exclusion

What is a post‑acquisition dispute?

After a merger or acquisition, the buyer may discover issues that were not disclosed or were incorrectly assessed during the due diligence process. These disputes can have major financial consequences for both the seller and the buyer.

Post‑acquisition disputes are often linked to disagreements over price adjustment clauses, breaches of asset and liability warranties, or breaches of non‑compete clauses by the seller.

Examples of post‑acquisition disputes:

the buyer discovers accounting errors after completion that affect the final price
the seller concealed, minimised, or failed to disclose disputes or legal proceedings involving the target company
former shareholders of the target set up a competing business in breach of their non‑compete obligation

Why consult a business litigation lawyer?

Shareholder conflicts and post‑acquisition disputes can undermine your company and jeopardise its development. Whether you are facing a governance dispute, a disagreement between shareholders, or a conflict arising from the acquisition or sale of shares, it is essential to act quickly and effectively.

Contact us today for a personalised quote and to protect your interests.

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Frequently Asked Questions

What are the main causes of shareholder or governance conflicts?

Shareholder conflicts often arise from strategic disagreements about the company’s management or direction, or from personal tensions that disrupt the company’s day‑to‑day functioning.

They may also result from breaches of the articles of association or a shareholders’ agreement, particularly where majority rules, meeting procedures or voting arrangements are not followed.

Finally, conflicts frequently occur during exclusion procedures, especially when the forced exit of a shareholder is contested.

What are the main causes of post‑acquisition disputes?

Post‑acquisition disputes frequently stem from disagreements over price adjustments, for example when the calculation of the final price based on closing accounts is challenged.

They also arise when the buyer discovers undisclosed or hidden liabilities, leading to contentious implementation of asset and liability warranties.

Disputes may also occur when the seller breaches a non‑compete clause, undermining the balance of the transaction.

What legal tools are available to resolve a governance deadlock?

Depending on the circumstances, solutions may include appointing an ad hoc representative or a temporary administrator, seeking urgent interim measures, applying for summary proceedings to stop an unlawful disturbance, or engaging in mediation or conciliation with a structured timetable.