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Pike & Lustig, LLP. We see solutions where others see problems.

Four Key Elements Of A Shareholder Lawsuit In Florida


A minority shareholder is a somewhat vulnerable position. By definition, they have limited ability to exercise control over the company—which means they must rely on corporate officers and corporate directors to protect the value of their investment. Under Florida law, shareholders have rights. They may even be able to file a claim against a company if their rights are violated.

That being said, shareholder disputes are complicated. There are certain legal requirements that must be met to bring a successful shareholder claim. In this blog post, our Miami shareholder dispute lawyers highlight four key things that a shareholder generally needs to establish to bring a successful legal claim in Florida.

  1. Material Misrepresentation or Material Omission 

With some exceptions, lawsuits filed by shareholders in Florida are based on allegations of material misrepresentation omissions. In effect, shareholders typically argue that the corporate directors or corporate officers failed to provide minority shareholders with accurate and complete information about their investor. Further, they argue that their failure to do so warrants a violation of their rights. There may also be other bases for a shareholder claim, including breach of fiduciary duty and breach of loyalty to the corporation. 

  1. Statement of Mind (Scienter) 

Similar to other jurisdictions, Florida follows the business judgment rule. As explained by the Cornell Legal Information Institute, the business judgment rule holds that a corporate officer or corporate director is generally not liable for a “bad” decision so long as:

  • They acted in good faith; and
  • Their actions were reasonably prudent.

In effect, the business judgment rule provides wide discretion to corporate decision-makers to run their business. It holds that shareholders cannot bring a claim simply because a specific business judgment worked out poorly. A corporate officer/director is only liable for misconduct, not for being “bad at their job.” 

  1. Actual Economic Harm 

To bring a successful legal claim as a shareholder in Florida, you must prove that you sustained actual losses. Courts will not award compensation in a shareholder lawsuit without actual harm. If a minority shareholder has not sustained actual losses related to the matter in question, then Florida courts will not hold the majority shareholder or a corporate board legally liable. 

  1. Causation Between Misrepresentation/Omission and Shareholder Losses 

Causation is a required element of any shareholder dispute. A plaintiff in a shareholder claim must prove not only that the corporate officer and directors engaged in misconduct and that losses were suffered, but that the losses were suffered because of the misconduct. In some shareholder lawsuits, causation can be a challenging issue to prove. Minority shareholders need strong legal representation.

Speak to a Shareholder Rights Attorney in Southeastern Florida

At Pike & Lustig, LLP, we have the skills and knowledge to represent clients in complex shareholder disputes. If you are a shareholder who believes that your rights were violated, please contact us to arrange your confidential initial consultation. Our shareholder rights attorneys provide legal representation In Miami-Dade County, Broward County, and Palm Beach County.


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