Legal Question in Business Law in California

There is no way to answer your question without reviewing the trust and the corporate bylaws. All I can tell you is generally as long as the shares are held in trust, the trustee is vested with full authority to vote those shares in any shareholder vote that comes up until the shares are distributed out of the trust and the transfer is recorded on the books of the corporation. The trustee is, however, bound to a fiduciary duty to the beneficiaries, which may affect how they are obligated to vote the shares. The bottom line is that this is a rather complicated situation and you need to hire an attorney. You won't find reliable answers in the internet.

Well, first, if the trust holds only 30% of the voting shares, there must be some other holder or holders who are voting with the trustee. Can you honestly and truly foresee getting a different result if the trust were terminated or the trustee replaced?

The mere fact that some shares are "tied up" temporarily in a family trust does not, in and of itself, necessarily imply that the corporation will be mismanaged or neglected or that it won't be able to function at a high level. I know of several companies where a controlling interest was held in a family trust for decades (example: the Santa Maria Valley Railroad) without any adverse consequences. A lot depends upon the competency of the trustee.

Next, I'd advise taking a copy of the trust to a local lawyer who specializes in trusts and estates to have the terms of the trust examined for possible limitations on the trustee's power to vote the shares held in trust.

Also, remember that corporations are run by their directors, not by their shareholders -- at least not directly. Shareholders vote for directors, and on certain other matters, but directors make the decisions on most matters. Look at the corporation's bylaws to see how directors are elected, whether cumulative voting is permitted, how frequently the board is re-elected, and other provisions that may allow a true majority to get its way -- if indeed a majority exists to oppose the trustee.

Finally, maybe consult with a lawyer specializing in corporations to see whether grounds exist for some more aggressive steps against the trustee. In extreme cases of mismanagement, minority shareholder rights can (sometimes, at least) be enforced by court action to remove a director, dissolve the corporation, etc., or perhaps there are grounds for a shareholder derivative suit against the trustee or a manager who is carrying out the trustee's objectionable policies.

Please feel free to contact me directly with particulars; I may be able to assist you further.