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 Montana, shareholder oppression occurs when those in control of a closely-held corporation engage in unfair or oppressive conduct toward minority shareholders. Montana law provides remedies for minority shareholders who are subjected to such treatment. Under the Montana Code Annotated (MCA), particularly in Title 35, which governs corporations, partnerships, and associations, minority shareholders have certain rights and protections. For instance, minority shareholders have the right to inspect corporate books and records, and they may bring a lawsuit if they are denied this right. Additionally, Montana law allows for a shareholder to bring a direct or derivative suit if they believe their rights are being oppressed or if the corporation is being mismanaged. Remedies for shareholder oppression can include monetary damages, buyouts of the minority shareholder's interests at a fair value, and in some cases, corporate dissolution. It is important for minority shareholders who believe they are being oppressed to consult with an attorney to understand their rights and the specific remedies available under Montana law.