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 Colorado, shareholder oppression refers to actions by those in control of a closely-held corporation that unfairly prejudice minority shareholders. Colorado law provides remedies for minority shareholders who experience such oppression. The Colorado Revised Statutes (C.R.S.) contain provisions that protect minority shareholders, including the right to inspect corporate records (C.R.S. 7-116-102) and the ability to bring a derivative action if the corporation is being mismanaged (C.R.S. 7-107-101). Additionally, minority shareholders may have a direct cause of action against the majority for oppressive conduct. The specific types of conduct that may constitute oppression in Colorado include denying access to corporate records, withholding dividends, terminating employment, misusing corporate funds, and manipulating stock values. When minority shareholders believe they are being oppressed, they may seek remedies such as a court order to stop the oppressive conduct, monetary damages, or in some cases, a forced buyout of their shares at a fair value.