Corporate Dissolution and Shareholders' Reasonable Expectations

Abstract

Within the last decade the highest appellate courts in a half dozen states have adopted the reasonable expectations standard as the basis for determining whether involuntary dissolution, a court-ordered buyout of a shareholder, or some other relief is appropriate in a corporation wracked with dissension. Lower appellate courts in other states have also adopted this approach, and two states include a reasonable expectation standard in their statutes. This article analyzes the historical development of the reasonable expectations standard and the implications for its continued use in resolving conflicts within corporations.

Keywords

Close corporations, Stockholders

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Authors

Robert B. Thompson (Georgetown University Law Center)

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