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Case Study - Shareholder Dispute

The Issue 

A minority shareholder of a privately held nationwide addiction treatment center noticed that they were not receiving the correct distributions they were supposed to receive under their shareholder agreement. They knew that something was off because of the reduced distributions, but did not know how to prove that this was occurring.

Services Provided

The minority shareholder reached out to Citrin Cooperman to quantify economic damages and provide expert witness testimony in this shareholder dispute. Citrin Cooperman analyzed financial records, including tax returns and general ledgers, in order to analyze due to/due from transactions between the various entities.

It was alleged that the due to/due from accounts were used to move money in order to reduce distributions to the minority owner. The Citrin Cooperman Forensic and Litigation Advisory Services team analyzed general ledger accounts for a period of five years to determine amounts due back to the entity. In addition, the general ledger expense accounts were reviewed to identify expenses paid by the minority shareholder’s entity that were related to other entities, and the team also analyzed overpayment of management fees based on the management agreement.

The Result

In total, our team quantified losses of tens of millions of dollars. The work performed in this shareholder dispute, including providing expert testimony, led to a favorable outcome for the client.

Are you dealing with a shareholder dispute? Contact Citrin Cooperman’s Forensic and Litigation Advisory Services team to learn how we can help resolve your dispute, so you can focus on what counts.

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