The Oklahoma Bar Journal January 2023

If a lawyer represents a minority shareholder who did not negotiate contractual provisions to protect the client’s interests, it may be possible to utilize an argument for a judi cial remedy in case of a freeze-out. Since Oklahoma provides essen tially no protection for minority shareholders in either statutory or case law, a fair argument could be made for the implementation of a judicial remedy to the freeze-out, not unlike the authorities discussed within this article. 32 attorney for Doerner, Saunders, Daniel & Anderson LLP and is an active member of the firm’s Executive Committee. Mr. Kirk focuses his practice on a broad range of acquisitions, divestitures, mergers, restructures, reorganizations, secured financing and commercial real estate, including extensive work in lease negotiation and drafting. Most recently, he has been nationally recognized by reputable organizations and publications for his outstanding achievements in real estate law, along with bankruptcy and creditor debtor rights/insolvency and reorganization law. Alexandra J. Gage is a skilled attorney for Doerner, Saunders, Daniel & Anderson LLP. Her practice includes a variety of transactional matters involving employment law, corporate law and contract disputes. When she’s not helping clients fulfill their business objectives, Ms. Gage applies her leadership skills as an active board director of the OBA Young Lawyers Division for District 6. She also attends educational leadership development seminars for the YLD Leadership Academy of the Tulsa County Bar Association. ABOUT THE AUTHORS D. Benham Kirk is an experienced transactional

lawyer should discuss the possibil ity of oppression with their client. The client should know the risks of freeze-out in such circumstances and be able to make an informed decision on whether to enter into this kind of business venture. If the client desires to move forward, providing provisions to protect the client in a subscription and/or shareholder agreement, corporation bylaw or another governing docu ment may evidence the parties’ intent to guard against oppressive conduct and minimize the prospect of litigating an unsettled issue in the future. However, a client can also end up as a majority shareholder on some issues. In these instances, the protection of minority rights could hinder the majority’s aims. Be sure to discuss with your client which assets and issues need the high est levels of protection. Instead of doing a general or overall protec tion of minority rights, it may be best to simply protect the interests and assets most important to them and accept the business risk with the people whom the client has chosen to do business with respect to other minor issues.

the shareholder owns 25% or more of the shares in the corporation. 29 Neither the Legislature nor the judiciary have explained what is considered “good cause” under this statute. Oklahoma courts have noted that, in general, dissolu tion may occur if the minority shareholder proves fraudulent mismanagement or misappropri ation of funds by the officers. 30 Although mismanagement and misappropriation are not the same as oppression, it does correspond to the majority shareholders’ fiduciary duties. 31 The existence of this statute for a specific type of corporation may be evidence that Oklahoma will enact further statutory protections for minority shareholders in close corporations rather than implementing judicial relief for the issue. ultimately decides, lawyers should utilize what they know to best protect the interests of their clients incorporating under Oklahoma law. If a client is seeking to set up a close corporation or purchase shares of a close corporation, a A LAWYER’S RESPONSE No matter how Oklahoma

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THE OKLAHOMA BAR JOURNAL