Balvik v. Sylvester concerns oppression in a close corporation. Does terminating a minority shareholder from management constitute oppression?

• A. Yes, if it deprives them of control and economic benefits.
• B. No.
• C. Only if it involves a dividend.
• D. Only if the shareholder seeks dissolution.

Answer: (A)

In oppression cases involving close corporations, the protection hinges on whether conduct strips the minority of the governance power and the economic benefits they reasonably expect as shareholders. Balvik v. Sylvester makes this clear: removing a minority shareholder from management is oppressive if it takes away their control over the business and their potential to share in the company’s profits. In a close corporation, where ownership and management are tightly linked, court cases recognize that exclusion from managing decisions fundamentally undermines the minority’s stake, not just their current payout. So the act of terminating a minority from management can be oppressive because it deprives them of both the ability to influence future decisions (control) and the ongoing opportunity to benefit financially from the business (economic benefits).

Dividends, while important, aren’t the sole measure of oppression, and the remedy isn’t limited to dissolution. The court can address the violation through remedies like buyouts, reconstituting governance, or other protections that restore the minority’s rights.