Stephen J. Siegel

Business Law Today, an online publication of the American Bar Association (ABA) Business Law Section, published an article by Stephen J. Siegel on October 29, 2012.  

The article is entitled “The Stock Issuer’s Dilemma: How Duties to Shareholders Limit an Issuer’s Options in Employee Disputes.” Link. The article discusses the restraints a stock issuer must exercise in disputes with former employees who own restricted stock.  

“When a dispute arises between a stock issuer and its former employee who owns restricted shares of the company’s stock, the company may be tempted to use its powers as issuer to gain leverage in the dispute,” Mr. Siegel wrote. “For example, the former employee may want to sell restricted stock while the issuer may not want to facilitate such a sale until the dispute is resolved. But the law sharply circumscribes an issuer’s ability to stop or delay share transfers in a dispute. In particular, an issuer’s authority to decline to register a stockholder’s share transfers are limited — even when the stockholder may have engaged in fraud.”

“As a result, in disputes with former employees who own restricted stock, a corporation must observe substantial restraint in exercising its powers as stock issuer,” Mr. Siegel explained. These restraints are the subject of the article.

Mr. Siegel concentrates his practice in commercial litigation. He has a particular depth of experience in closely-held company and partnership disputes involving claims of securities fraud and/or breach of fiduciary and contractual duties; energy disputes; non-compete, trade secrets and employment termination disputes; and real estate litigation. Mr. Siegel is also a trained mediator and is qualified to mediate a wide variety of business disputes. He is a member of the Leadership of the Section of Litigation of the American Bar Association (ABA). He is co-chair the 2013 Section Annual Conference of the ABA Section of Litigation set for April 24-26, 2013, in Chicago. 

For more information, contact Mr. Siegel at (312) 419-6900 or ssiegel@novackmacey.com.