While stocks and shares can play major roles in company finances, they can also be points of contention. If company higher-ups believe that some sort of wrongdoing has occurred, shareholder disputes could come about. These conflicts could even have the potential of causing legal issues that lead to litigation.
Texas readers may be interested in a dispute that currently has rideshare company Lyft threatening litigation. Apparently, the company believes that investment banking company Morgan Stanley has been helping investors and shareholders participate in short-selling stocks, though the individuals are subject to lock-up agreements, which prevent them from selling their shares. Lyft sent Morgan Stanley a formal letter, asking the company to deny that any type of short product had been created and, if such actions did occur, that the company provide the names of shareholders who participated.
At the time of the report, Morgan Stanley had not yet formally replied to Lyft’s letter but did provide a comment for the report, indicating that the company did not market or carry out a sale, short sale or another action that involved Lyft stock or shareholders, subject to lock-up agreements. Still, Lyft’s letter did indicate that legal action could be taken against the investment firm if needed. If it is discovered that the company did attempt to get around the lock-up agreements, Morgan Stanley could stand accused of tortuous interference.
In addition to issues with the investment company, any shareholders found to have violated their lock-up agreements could also face consequences. Though shareholder disputes can cause setbacks for companies, ensuring that they are properly handled could prevent future issues. Texas business owners who believe that their shareholders may be acting inappropriately may want to discuss their concerns with their legal counsel.