Arthur L. Bugay, Esquire, of Galfand Berger, LLP, and co-counsel, filed suit alleging oppression of a minority shareholder.
Shareholder oppression occurs when the majority shareholders in a company take action that unfairly prejudices the minority shareholders. In this matter, our client Marvin Roffman co-founded Roffman Miller & Associates, Inc. (“RMA”) in 1990 with R. Peters Miller. Mr. Roffman was initially president of the firm and chairman of the Board of Directors.
By 2007, however, RMA was governed by a majority of the shareholders who excluded Mr. Roffman from its management team, prevented him from being a client advisor, and denied him access to a large asset client from which RMA was receiving many client referrals.
Mr. Roffman filed a minority shareholder oppression lawsuit alleging that RMA’s management team effectively excluded Mr. Roffman from the company and devalued the stock he held.
RMA offered to purchase Mr. Roffman’s shares for $1,000,000.00, an amount that was less than half of the amount which RMA had declared to be a “fair” redemption price in August 2007.
After Mr. Roffman commenced his minority shareholder oppression lawsuit, RMA counterclaimed, alleging a theft of trade secrets, which Mr. Roffman denied.
A month long arbitration resulted in an award of $2,140,933.00 to Mr. Roffman. RMA’s countersuit claims were dismissed.
For more information on this case or to discuss a potential minority shareholder oppression lawsuit or other business tort case, call Arthur Bugay of Galfand Berger, LLP at 1-800-222-USWA (8792) or contact the firm online.