Shareholder oppression—also known as minority shareholder oppression, squeeze out, or freeze out—is a general term for a claim or cause of action that may be made by a minority shareholder—a shareholder who owns less than a controlling percentage of the company—and is based on the alleged unfair or oppressive treatment of the minority shareholder.

Minority shareholder oppression claims often arise in closely-held corporations—corporations that are not publicly traded; in which a relatively small number of people own most or all of the shares; and in which the shareholders are often family members or people who know each other.

Those in control of a closely held corporation may use various squeeze-out or freeze-out tactics to deprive minority shareholders of benefits; to misappropriate those benefits for themselves; or to induce minority shareholders to relinquish their ownership for less than it is otherwise worth.

The types of conduct most commonly associated with such tactics include:

• denial of access to corporate books and records;

• withholding payment of, or declining to declare, dividends;

• termination of a minority shareholder's employment;

• misapplication of corporate funds and diversion of corporate opportunities for personal purposes; and

• manipulation of stock values.

In Alabama, shareholder oppression occurs when those in control of a closely-held corporation engage in unfair or oppressive conduct toward minority shareholders. Alabama law recognizes the rights of minority shareholders and provides them with certain protections. For instance, minority shareholders have the right to inspect corporate books and records, and they may have a claim if they are denied this right. Additionally, minority shareholders may have legal recourse if they are subjected to actions such as the withholding of dividends, termination of employment, misapplication of corporate funds, or manipulation of stock values. Alabama courts may provide remedies such as requiring the payment of dividends, reinstating employment, or ordering the majority shareholders to buy out the minority's shares at a fair price. The specific remedies and the threshold for what constitutes oppression can vary, and it is often necessary to consult with an attorney to understand the full scope of rights and legal options available to minority shareholders in Alabama.