Business Litigation and Shareholder Actions
The firm regularly represents businesses and individuals in disputes involving any variety of business torts, shareholder and partnership disputes, employment relationships, and breaches of contract.
Over the past decade, Mark and Brian have developed a niche practice in shareholder and member oppression actions under MCL 450.1489 and 4515. They have represented plaintiffs and defendants in dozens of oppression cases involving wide ranging forms of relief, including corporate dissolution, buy-outs, and damages ranging from the hundreds of thousands to tens of millions of dollars – both in trial and through negotiations and settlement.
Mark and Brian's recoveries in business litigation cases have repeatedly ranked among the top recoveries in the state. In 2013 and 2015, Mark and Brian, respectively, obtained the #1 largest settlements reported in Michigan Lawyers Weekly, both in complex shareholder oppression cases.
Mark and Brian wrote the briefs in the first shareholder oppression case to reach the Michigan Supreme Court, helping to clarify and preserve the contours and proper application of the oppression statute. Madugula v. Taub (Michigan Supreme Court, July 15, 2014). Also, Mark and Brian worked on appellate briefing in a matter that ultimately was decided by the Michigan Supreme Court in a seminal decision concerning statute of limitations and accrual dates under both of Michigan’s oppression statutes. Frank v. Linkner (Michigan Supreme Court, May 15, 2017). Mark wrote a brief article summarizing the implications of this decision.
Most recently, the firm obtained a groundbreaking decision from the Michigan Court of Appeals in a member oppression case, reversing the trial court's ruling and ordering that a judgment be entered in favor of the firm's client on his member oppression and other claims. Castle v. Shoham (Michigan Court of Appeals, August 7, 2018).
Mark has written extensively on the subject of legal duties, rights, and obligations in the context of shareholding, partnership, and other fiduciary relationships. The Michigan Bar Journal published his writings on these subjects in 2012, 2008, and 2007. Brian has presented to attorneys and judges on shareholder litigation and business break-up issues for the State Bar of Michigan, and he has contributed to numerous articles published in the area of business litigation.
Recent $840,000 Corporate Oppression Settlement
The firm was recently featured in Michigan Lawyer’s Weekly for an $840,000 settlement it achieved on behalf of a minority shareholder who was frozen out of his a hotel business. The trial team in the case of Moyle v. Moyle, Montcalm County Circuit, Court Number 2016-21511-CZ, consisted of Rossman Saxe attorneys Mark C. Rossman, Brian M. Saxe, and Maxwell J. Goss, and also Bryan Reeder of the Grand Rapids law firm of Plachta Murhpy & Associates. The facts of the case painted a classic portrait of corporate oppression. The plaintiff, the minority member of a hotel business in southwest Michigan, brought suit against the majority ownership faction of the company for corporate oppression and other business torts. The plaintiff alleged that the defendants abused their majority control by freezing him out of business operations and terminating distributions notwithstanding ample cash reserves.
Prior to filing suit, plaintiff’s counsel engaged in due diligence with statutory demands for corporate documents and by noticing and conducting a transcribed member meeting. The defendants’ shortcomings in responding to the demands and failing to appear at the member meeting supported the allegations pled in the complaint.
In prosecuting the case, the attorneys for the minority-member plaintiff structured their proofs according to a seven-step theory of corporate oppression. They focused their testimonial and documentary discovery on proving the core components manifest in virtually every scheme of corporate oppression:
Step 1: Establish majority ownership.
Step 2: Assume sole managerial control.
Step 3: Control books, records, and finances.
Step 4: Undermine and demoralize minority owner.
Step 5: Divert company assets to self or other businesses.
Step 6: Terminate benefits of minority (employment, distributions, etc).
Step 7: Force litigation.
Heading into facilitation, the plaintiff’s attorneys were trial ready with proofs and demonstratives mapping out the particulars of the case. Evidence gathered in discovery revealed that the defendants acceded to majority ownership without paying for their units; usurped sole managerial control upon a fallacious premise; ran all the books through a related entity’s bookkeeper and accountant and withheld information from the plaintiff; marginalized and repeatedly insulted the plaintiff; funneled corporate monies to their other business; terminated the employment of the plaintiff and his wife without good cause; ended distributions while stockpiling cash and triggering S-corporation tax burdens; and, lastly, refused to pay fair value for the plaintiff’s interest in the company, thus forcing the litigation.
At facilitation, the majority owners agreed to purchase the plaintiff-minority’s one-third share in the company for $840,000. This amount was nearly 3 times the buy-out offered before the case was filed.
Business Formation, Transactions, and Contracts
Simultaneous with the economic boom in Southwest Michigan in recent years, the firm's commercial transaction and corporate governance practice has grown substantially. In May 2017, the firm added a new attorney, Lindsay Sikora, who now focuses her practice with Rossman Saxe principally in these fields. In addition to representing our clients with the various transactions that arise from time to time in the life of a business, we also also provide top flight corporate governance services, which include maintenance of an electronic corporate book, conducting meetings and keeping minutes, ensuring notices and votes are done correctly, and otherwise protecting the officers, directors and managers of companies from the liability and exposure that arises in connection with the performance of their duties. All too often, we have clients come to us where these aspects of business have been entirely ignored or mishandled. Managing the company in accordance with the statutes and keeping the correct corporate records is essential, both in terms of running the internal operations of the business and, most importantly, avoiding the litigation that is triggered by substandard corporate governance.
One of our specialities is in "righting the ship" when the the corporate books have gone astray. We provide prospective clients with a no-charge review and analysis of how their corporate governance can be improved.
We have extensive experience handling the following types of business transactions:
- Business incorporation and formation
- Corporate governance
- Company By-Laws
- Shareholder, membership, and partnership agreements
- Operating Agreements
- Employment and independent contractor agreements
- Warranties and liability limitations
- Employee handbooks
- Intellectual property protections
- Buy-Sell agreements
- Stock Options
- Real estate transactions
- Severance agreements
Intellectual Property Litigation and Counseling
The firm also has substantial experience in patent, trademark, trade secret, and copyright litigation.
Banking and Special Assets Litigation
The firm has has extensive experience in banking and special assets litigation. Mark has successfully litigated over 100 commercial special assets cases over the years. He utilizes unique and aggressive motion practice and collections strategies to move these cases toward resolution as expeditiously as possible. He has extensive experience in foreclosure by advertisement and judicial action and is expert in clearing complicated title defects.
On November 19, 2015, the Michigan Court of Appeals affirmed a nearly $1 million judgment that Mark obtained at trial on behalf of a financial institution after 5 years of litigation. Sterling Bank & Trust F.S.B. v. SC Southfield. On November 30, 2015, the Court of Appeals affirmed a summary disposition dismissal that Mark achieved for his client in a lender liability case. Younce v. JP Morgan Chase Bank.
Family Law; Custody and Divorce
The firm expertly handles a variety of family law matters. Mark has an exemplary track record of resolving such cases early, and short of trial, through facilitative mediation, helping to minimize the financial and emotional impact that such cases have on a family. In 2018, Mark was selected by his peers for inclusion as a Top Lawyer in DBusiness for family law.
The firm also specializes in class action litigation, including in the areas of ERISA benefits, consumer protection, and property rights. Brian has successfully litigated class actions in courts around the nation. He has obtained groundbreaking judgments and settlements on behalf of thousands of children with autism in class actions challenging the denial of health care benefits. Two such settlements ranked among the top 5 class action recoveries reported in Michigan the year they settled. Brian also obtained a property damage settlement for a class of homeowners that ranked among the top 5 class action recoveries reported that year.