News & Blog

Stay up-to-date with interesting perspectives from the team at McCabe Curwood.

Published by Kaj Scholte
Feb 28, 2019 in Corporate

Shareholder agreements and the penalty doctrine

Shareholder agreements will often contain a clause requiring a defaulting party to transfer its shareholding at an agreed price on the occurrence of a specified default event. Where the agreed price is less than the market value of the shareholding, the clause may constitute a penalty and be unenforceable. On one hand, courts have held that the transfer for $1 of a $13 million shareholding was a penalty while on the other, a 5% discount on the...
1 2 3 4

Get In Touch

The best relationships start with good conversation.
We are always ready to give advice, so contact us today.