Gavin Lentz on Changes to PA Act 170 and its Effect on Commercial Litigation
Below is an excerpt from the piece.
If you represent a minority owner in a dispute involving a pre-2017 shareholders agreement that does not specify that a majority vote is sufficient for all corporate actions, these changes are good news. The new act requires “unanimous consent” of all owners to make any decisions that are deemed “outside the regular course of business.” This includes amending operating agreements or selling any ownership interest in the company. On the other hand, when representing a majority owner you will now need unanimous consent from even a 1 percent owner if you are going to make any significant decisions that are “outside the ordinary course of business.” I used to tell my clients once you get 51 percent control you are the “king,” but that is no longer the case unless the company had an existing operating agreement that specifically called out the ability of a majority vote to make such decisions.
Read the rest of the article about PA Act 170 at The Legal Intelligencer.
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