Legal Question in Legal Ethics in Pennsylvania

Minority Shareholder Rights

I am a minority shareholder(20%)of a dental practice, an S-Corporation and have been for 3 years. Can my partner, the senior partner(80%), send the past 2 years of corporate tax returns, past 3 years of payroll information of himself and me, and the past 3 years of provider totals(total revenue by provider broken down)without my knowledge and consent to a new accountant? He asked the office manager to ''keep it quiet'' and had her gather and send the info. I have a restrictive covenant in our agreements should I choose to leave and am looking for information to gather to help null and void it.


Asked on 3/29/05, 8:38 am

1 Answer from Attorneys
William Marvin Cohen, Placitella & Roth, P.C.

Re: Minority Shareholder Rights

I'm a little astonished that you would post such a question, which is much more sophisticated than the usual fare here. As an educated professional, you certainly should realize that:

1. The answer is going to depend on the language of the shareholder agreement. A lawyer can't answer your primary question in the abstract, any more than you could tell me if I'm going to need root canal for a toothache without looking at the films.

2. If you want to get out of your contract, you're going to need an attorney.

3. Posting strategic questions on a public website is a bad idea. Suppose the majority owner's attorney just happens to see your message, recognizes the situation, and uses it to show the court that your complaint about the accountant is just a pretext to get out of the contract?

You should retain an attorney, and consult privately with that attorney. (I don't handle these types of cases, so I'm not speaking from self-interest).

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Answered on 3/29/05, 8:58 am


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