An intentional oversight, not sharing the truth or misleading information — these are all statements that can be used to describe the interactions among some business professionals. In many cases, the damage done is minimal or nonexistent and the matter is never taken into further consideration. However, in other cases, potential damage exists, shareholder disputes become apparent and the business may suffer. Ohio business professionals typically try to avoid the later scenario.
Recently, shareholders of Zillow Group Inc., a real estate marketing company, filed suit against several of the company’s directors. Shareholders claim that in a securities filing made in 2017, these directors violated the law and put the company in jeopardy of being charged with securities violations. These shareholders indicate that this filing did not adequately address possible Real Estate Settlement Procedures Act (RESPA) non-compliance issues.
The shareholders bringing the lawsuit hold that as directors of the company, these individuals should have known that misleading information was being presented. Additionally, they should have taken steps to correct the situation and protect the company. Shareholders claim that by not taking action the directors have not fulfilled their fiduciary duties to the company.
Ohio businesses often depend upon shareholders for needed funding. In turn, these shareholders depend upon those operating the business to do so in an appropriate manner. When the way in which the company is operated or the possibility of misleading information being presented and relied upon comes into question, then there is possibility of shareholder disputes. Experienced legal counsel can help to sort through the apparent concerns and perhaps avoid them to begin with.
Source: bna.com, “Zillow Execs Face Shareholder Suit on Enforcement Threat”, Chris Bruce, Jan. 10, 2018
