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 Connecticut, minority shareholder oppression is addressed under state law, which provides certain protections for minority shareholders in closely-held corporations. The Connecticut courts recognize the concept of minority shareholder oppression and have established case law that allows minority shareholders to seek remedies when they are unfairly treated or squeezed out by those in control of the corporation. The Connecticut General Statutes do not have a specific statute addressing minority shareholder oppression, but courts may rely on common law principles and other statutory provisions related to corporate governance to address such claims. Actions that may be considered oppressive include denying access to corporate records, withholding dividends, terminating employment, misusing corporate funds, and manipulating stock values. Remedies may include forcing the majority shareholders to buy out the minority's shares at a fair price, awarding damages, or in some cases, ordering corporate dissolution. Minority shareholders in Connecticut who believe they are being oppressed should consult with an attorney to explore their legal options and to ensure their rights are protected.