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 Florida, shareholder oppression claims are addressed under state statutes and case law. Florida law does not have a specific statute that defines or addresses minority shareholder oppression per se, but minority shareholders in Florida can seek relief under the Florida Business Corporation Act (FBCA). The FBCA provides remedies for shareholders when corporate directors or those in control of the corporation engage in actions that are illegal, fraudulent, or willfully unfair and oppressive. Remedies may include access to corporate records, and in cases of extreme misconduct, minority shareholders may petition for involuntary dissolution of the corporation. Additionally, the common law principles of fiduciary duty require majority shareholders and directors to act in the best interest of the corporation and all shareholders, which can provide a basis for legal action if these duties are breached. It is important for minority shareholders who believe they are being oppressed to consult with an attorney to explore their legal options, which may include seeking an injunction, damages, or other equitable relief.