Toronto Shareholder Disputes Lawyers

It’s no secret that shareholder disputes can have a detrimental effect on the success of any business. That’s why it pays to have experienced and knowledgeable Toronto Shareholder Disputes Lawyers who specialize in resolving such conflicts. At Roberts & Obradovic Law, our team of corporate commercial lawyers are well-versed in advising directors, officers, and shareholders of corporations of all sizes and industries. We understand how quickly these issues can disrupt a company’s operations and strive to resolve them promptly with minimal disruption. Our primary goal is to ensure your venture maintains its growth trajectory while avoiding long-term damage due to shareholder disputes. With years of experience under our belt, we guarantee you’ll get the best possible outcome for your business when you choose us as your trusted legal partner.

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Resolving Shareholder Disputes: Understanding the Methods Available in Ontario and Canada

Shareholder conflicts can hinder a business’s smooth operation and success. Nevertheless, there are multiple options to tackle such issues in Ontario and Canada, with distinct pros and cons. These options are:

  • Negotiation: This method involves the disputing parties working out a decision themselves. The decision-making power is left in their hands to come to an agreement.
  • Mediation: In this approach, a neutral third party aids the disputing parties in finding a resolution on their own. They guide the parties to identify common interests and perspectives to come to an acceptable solution.
  • Arbitration: When choosing arbitration, a third party makes a binding decision on the matter under dispute. This means that the decision is final and cannot be challenged in court.
  • Litigation: In litigation, the dispute is resolved through the court system, with each party presenting their case to a judge. The outcome is then decided by the judge, which may or may not be favorable to either party. It is often a lengthy and expensive process with no guarantee of a satisfactory resolution.

Understanding Negotiation in a shareholder dispute

Negotiation should be the first option for resolving disagreements, but too often, it is the last. It involves the parties or their representatives meeting to discuss the problem and come to an agreement on how to resolve it. Both parties must be willing to enter into negotiations, and the goal should be to find a solution, even if that means making concessions. Negotiation can be as simple as a phone call or an exchange of correspondence, or it can involve a private meeting. The process is cooperative and non-binding, and either party can withdraw if the other is unreasonable or intransigent. Successful negotiation requires an understanding of the issues and a willingness to cooperate and compromise. A competitive approach or being too accommodating can hinder the process. It’s essential to weigh the advantages and disadvantages and understand the legal consequences of failing to settle.

In situations where one party lacks experience or is in a weaker position, it’s advisable to negotiate through a representative, such as a lawyer. While it incurs extra costs and a loss of control, it overcomes the lack-of-skill problem and creates a buffer between the parties. Choosing a skilled negotiator is crucial to avoid predisposition to litigation. Lawyers can better understand the legal issues involved, and if the matter proceeds to litigation, they are already involved in the process. It’s worth noting that any legal concession, admission, or compromise made during negotiations, when made without prejudice, will not harm the parties if the negotiations fail and litigation results. Successful negotiation, with concessions and compromises, can improve the business relationship. Overall, negotiation is the best approach to resolving disputes, provided parties cooperate, compromise, and understand the legal ramifications.

Understanding Mediation in a shareholder dispute

When negotiation fails to reach a resolution, mediation provides an effective alternative. Unlike negotiation, mediation involves a neutral third party trained to help parties reach an agreement. The mediator ensures both sides are heard and elicits information to find potential solutions and compromises. Mediation can be informal or structured, with rules and a timeframe, and the mediator meets with both parties using various techniques to find common ground. Skilled mediators require specialized training and certification, and mediation is confidential, fast, and enforceable like any other contract.

Mediation is a suitable approach to resolving shareholder disputes when confidential or sensitive information must be protected, speedy resolution is necessary, ongoing relationships need to be maintained, trust is involved, or parties seek a settlement. Mediation facilitates cooperation and compromise, with the mediator’s persuasiveness, skills, and neutrality facilitating the process. Parties retain control over the problem, and any agreement reached can be enforced like any other contract.

Understanding Arbitration in a shareholder dispute

Arbitration is a powerful tool for resolving shareholder disputes, as it involves the parties surrendering decision-making authority to a neutral third party. While arbitration is usually voluntary, it may be mandated by statute in situations such as labor relations or included in a contract before any dispute arises. Typically, the arbitrator is selected from a pool of trained and certified professionals with expertise in the subject matter of the dispute. Organizations of professional arbitrators have been established, with members adhering to professional and ethical standards. Arbitration is commonly used to resolve external disputes with creditors, suppliers, or customers, as well as internal disputes with employees and shareholders or between departments.

Parties can stipulate in their contract the requirement for arbitration, how the arbitrator is to be chosen, and whether provincial arbitration legislation should apply to the process. The specific process may be left to the arbitrator or set out in the agreement, with procedures that are fair and acceptable to both parties. Before the arbitration hearing, both sides are required to disclose relevant information. At the hearing, lawyers or other representatives examine witnesses, present documents, make arguments, and summarize their cases. The arbitrator is not required to follow precedent in reaching the decision, but their decision is binding on the parties and generally not appealable. However, courts still have the right to supervise and review the decision-making process.

Understanding Litigation in a shareholder dispute

If parties are unable to reach a resolution through other means, shareholder disputes may necessitate litigation. Although litigation can be burdensome, time-consuming, and nerve-racking, it may be required to uphold one’s rights and benefits.

Our litigation lawyers are adept at handling a wide range of shareholder disputes, including those arising from mergers and acquisitions, corporate governance, breaches of fiduciary responsibilities, shareholder oppression, and more. We have represented clients in various locations and industries and have a proven track record of attaining favorable settlements and courtroom results.

Get in Contact with Legal Experts in Shareholder Disputes

At Roberts & Obradovic Law, we understand how challenging shareholder disputes can be. Our skilled business lawyers are available to offer the support you need to navigate these complex issues. Whether you need help reviewing your existing agreement or want to explore new options, we’re here to help. To schedule a no-obligation consultation, contact us today at (647) 724-5179 or fill out our online form.