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 Kentucky, shareholder oppression occurs when those in control of a closely-held corporation engage in unfair or oppressive conduct toward minority shareholders. Kentucky law recognizes the rights of minority shareholders and provides them with certain protections. Under Kentucky Revised Statutes (KRS) Chapter 271B, particularly KRS 271B.14-300, minority shareholders have the right to inspect and copy corporate records upon written notice, which can help prevent denial of access to corporate books. Additionally, minority shareholders may have a cause of action for oppressive conduct under the common law, which can include withholding dividends, terminating employment, misusing corporate funds, and manipulating stock values. If minority shareholders believe they are being oppressed, they may seek remedies such as a buyout of their shares, damages, or in some cases, dissolution of the corporation. It is important for minority shareholders to consult with an attorney to understand their rights and the specific remedies available under Kentucky law.