Legal Question in Business Law in California

Wow! That's a difficult one. First of all, I assume the business is a corporation. Other types of business organization may well be more friendly toward your rights. Also, I assume you don't have a shareholder agreement with the majority owner that provides any protection or recourse. I must also assume that you are correct that the majority owner knows his decision will hurt the company. You may possibly just be out of luck in fighting the majority owner's decisions. However, before giving up, you or your lawyer should first review the corporation's documents, including the bylaws, to see whether you have any rights as a substantial minority owner. Do you have, by any chance, a board of directors not immediately dominated by Mr. 65%?

The law is cautious about taking sides in disputes over matters of business judgment, and thus assumes that a majority owner's decisions are correct, or at least, within the province of the majority owner to make, even if ultimately dead wrong. Fighting them in the legal system is an uphill battle.

Nevertheless, in a few rare cases, it may be possible to show that the majority owner is not acting in the best interest of the corporation. Minority shareholders do have definite rights, despite basically being foreclosed from casting winning votes at board meetings. Please feel free to contact me directly with details -- especially if this is NOT a corporation, as I've assumed. If the business is a general partnership, my answer would be quite different.

The type of organization and your operating agreements/partnershp agreement/incorporation documents may give you an indication of what initial recourse you may have...

Generally The business judgment rule for corporate director or reasonableness test for other organizations may offer some protection if the decision is reasonable(not neglient) or made in good faith, through the use of due care,and made in the best interest of the company....

If he makes an unreasonable or negligent decsion that will hurt the company financially (both actual cash and goodwill), he may face liability for the damage caused...

I would think you want to put him on notice in writing..