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 Hawaii, shareholder oppression refers to the unfair treatment of minority shareholders by those in control of a closely-held corporation. Minority shareholders, who own less than a controlling percentage of the company, may experience actions that are detrimental to their interests, such as being denied access to corporate records, not receiving dividends, being terminated from employment, or seeing corporate funds misused for personal gain. Hawaii law provides remedies for minority shareholders who are subject to such oppressive conduct. Under Hawaii Revised Statutes Section 414-411, minority shareholders can petition the court for relief if the acts of the directors or those in control of the corporation are illegal, oppressive, or fraudulent. The court has the discretion to order a variety of remedies, including but not limited to, the purchase of the minority shareholder's shares at a fair value, an injunction against the oppressive conduct, or the appointment of a receiver to manage the corporation. It is important for minority shareholders in Hawaii to be aware of their rights and the legal avenues available to address shareholder oppression.