Shareholders can play an important part in any major company. However, if they feel that a company owner or another related party is not handling the business affairs properly, a shareholder dispute could arise. In such cases, legal action may move forward as shareholders attempt to hold the accused party accountable for actions that may have caused damages to the shareholders or the company as a whole.
Minnesota readers may be interested in such a lawsuit currently underway involving Under Armour founder Kevin Plank. According to reports, shareholders allege that Plank participated in fraudulent accounting practices and questionable sales tactics as the company’s popularity declined. They claim that company issues and these questionable practices were hidden from public filings.
The practices that the company is alleged to have participated in include offering discounts and adjusting contract terms with retailers to get them to take products early. Additionally, the company is accused of sending new inventory to T.J.X. Co., of which off-price retail stores like T.J. Maxx are a subsidiary, in hopes of quickly selling the products rather than sending them to Under Armour factory stores for full-price customer sales. A statement from the company indicated that it believes the company has conducted appropriate sales and accounting practices.
After noticing questionable tactics and practices by a company, shareholders may have reason to move forward with litigation, as this case shows. A shareholder dispute could allow those affected to protect their rights as partial owners in the company. Individuals facing this type of ordeal who want to understand their legal options may find it useful to discuss their concerns with experienced Minnesota attorneys.