Illinois corporation stockholders and shareholders beset by Board of Director Deadlocks or Stockholder Deadlocks have a powerful tool to resolve corporate deadlocks that Courts can avail themselves of; Illinois statutes 805 ILCS 5/12.56.  As part of a Court’s powers to resolve corporation deadlocks under the Illinois Business Corporation Act (BCA) a Court may “take into consideration the reasonable expectations of the corporation’s shareholders as they existed at the time the corporation was formed and developed during the course of the shareholders’ relationship with the corporation and with each other”. Using this provision, the court in Gingrich vs. Midkiff No. 5-08-0359 June 15, 2010 imposed a covenant not to compete (non compete provision) where there was none in the documents signed by the parties.

For more information on deadlocks, shareholder disputes, or other corporate law concerns, contact Horowitz & Weinstein.

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