Louisiana shareholders must give five days written notice in a signed demand to inspect corporate records and accounts. La. Stat. Ann. § 1-1602(A) (West 2016). The shareholder must be a shareholder of record for at least six months and own least 5% of the outstanding shares. Id. § 1-1602(C). The shareholder's inspection demand must be "in good faith and for a proper purpose.” Id. § 1-1602(D).
The court can limit a shareholder request to inspect records if it finds that the shareholder is attempting a “fishing expedition.” Feil v. Greater Lakeside Corp., 31 So.3d 520, 525 (5th Cir. Jan. 26, 2010). However, the court can expand or limit the right to inspect depending on the situation. Id.
In Louisiana, "[i]f a corporation engages in oppression of a shareholder, the shareholder may withdraw from the corporation and require the corporation to buy all of the shareholder's shares at their fair value." La. Stat. Ann. § 1-1435(A). Oppression occurs when the corporation's fails to deal "fairly and in good faith with the shareholder" over a period of time. See id. § 1-1435(B). To do determine fairness and good faith, the court assesses the oppressed shareholder's conduct as well as "the treatment that a reasonable shareholder would conducer fair under the circumstances, considering the reasonable exctations of all shareholders in the corporation." Id.
Louisiana directors must "act in good faith and in a manner the director reasonably believes to be in the best interests of the corporation." Id. § 1-830. Officers and directors owe a fiduciary duty to "the corporation and its members." Id. § 12:226.
The shareholder must be an owner at the time of the act complained of and must "fairly and adequately represent the interests of the corporation in eforcing the right of the corporation . . . ." La. Stat. Ann. § 1-741 (West 2015). In addition, before commencing any proceeding, the shareholder must serve written demand on the corporation to "take suitable action" and give the corporation 90 days to respond, unless "irreparable injury to the corporation" would result by waiting this time period. Id. § 1-742.
We are licensed only in Texas
In order to remain on the cutting edge of business owner rights law, Fryar Law Firm keeps abreast of legal developments in all 50 states. This 50-state survey is presented for educational purposes. However, we do not hold ourselves out as experts on the law of any jurisdiction other than Texas, and we may not practice law in any other state, with the following exceptions:
The lawsuit involves a non-Texas company but may be brought in Texas courts--example, if the client is a Texan or the company operates in Texas.
We are part of a legal team that includes local counsel. Out of state legal teams benefit from our experience when we consult. We may also act as lead counsel, if we have local co-counsel and permission of the court.
We are offering general consultation and are performing our work in Texas. We often consult with out-of-state clients on litigation strategy or assist them in organizing for litigation or settlement or in putting together a legal team. We also assist out-of-state clients in exercising their rights to corporate information.
This post represents our opinion regarding the relevant shareholder oppression and minority ownership rights law. However, not everyone agrees with us, and the law is changing quickly in this area. This page may not be up to date. Be sure to consult with qualified counsel before relying on any information of this page. See Terms and Conditions.