# Minority shareholders

`kaal:entity:minority-shareholders`

**Status.** derived

This node is assembled mechanically from the 5 claims that carry the concept tag `minority-shareholders`. It is a roster of what the corpus says under this term. It is **not** an adjudicated definition: no single statement here has been ruled canonical, and no first-appearance call has been made. Read the claims and judge for yourself.

## Every claim under this term

5 claims across 3 works, 2004 to 2017.

**2004**

- [617681-017](https://wulfkaal.github.io/claims/617681-017) [mechanism/argued] -- Defects in a civil law jurisdiction's corporate statute, such as inadequate minority shareholder protection, are more easily fixed than defects in a judiciary that fails to apply the statute predictably and uniformly.
  > Problems with a civil law jurisdiction's underlying statute – for example if it gives inadequate protection for minority shareholders – are also more easily fixed than problems with a judiciary that fails to apply the statute in a predictable and uniform manner.
  Christian Kirchner, Richard W. Painter, Wulf A. Kaal, Regulatory Competition in EU Corporate Law after Inspire Art Unbundling Delaware's Product for Euro (2004). SSRN: https://ssrn.com/abstract=617681

**2010**

- [1558614-015](https://wulfkaal.github.io/claims/1558614-015) [failure/argued] *(failure mode)* -- German corporate law's historical focus on conflicts between controlling and minority shareholders leaves it poorly equipped to address managerial abuse of power, including excessive risk taking by managers.
  > Ar- guably, a legal system that focuses on the interaction of controlling and minority shareholders is not as well equipped to deal with mana- gerial abuse of power, including excessive risk taking by managers.
  Painter and Kaal, Initial Reflections on an Evolving Standard Constraints on Risk Taking by Directors and Officers in (2010). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1558614

**2017**

- [3017612-012](https://wulfkaal.github.io/claims/3017612-012) [mechanism/argued] -- Shareholder agreements matter more in closely held corporations because minority holders have sunk substantial time or capital into the enterprise yet cannot exit through sale, since their shares lack a ready market.
  > Minority shareholders in a closely held corporation are likely to have invested substantial time or capital in the enterprise, but those dissatisfied with the corporation's operation cannot sell their shares easily because the shares are not readily marketable.
  Wulf A. Kaal, Shareholder Agreements - National Report of the United States of America (2017). SSRN: https://ssrn.com/abstract=3017612
- [3017612-017](https://wulfkaal.github.io/claims/3017612-017) [condition/evidenced] -- To escape the procedural hurdles of derivative litigation and recover directly, a shareholder must persuade the court that those abusing control of the corporation harmed the shareholder directly rather than the entity.
  > To avoid some of the procedural hurdles of derivative litigation and enable direct recovery, shareholders must convince the court that individuals abusing control of the corporation were directly harming the shareholders.
  Wulf A. Kaal, Shareholder Agreements - National Report of the United States of America (2017). SSRN: https://ssrn.com/abstract=3017612
- [3017612-019](https://wulfkaal.github.io/claims/3017612-019) [mechanism/asserted] -- Veto rights are the price minority shareholders extract for capital: minority holders may withhold capital contributions unless they receive veto powers over major corporate decisions.
  > For example, minority shareholders may refuse to provide capital contributions unless they are granted veto powers over major corporate decisions such as asset sales,
  Wulf A. Kaal, Shareholder Agreements - National Report of the United States of America (2017). SSRN: https://ssrn.com/abstract=3017612

## Verify

Every claim above resolves to a record carrying a verbatim source quote, the sha256 of the source PDF, and a preformatted citation. Nothing here asks to be taken on trust.

    curl -s https://wulfkaal.github.io/entities/minority-shareholders.md | sha256sum

**Canonical form.** This markdown file is the canonical hashed representation of this entity node. Its sha256 is the content hash.