The majority share holder of this company allowed assets (land) to be auctioned off for non payment of municipal taxes through a deliberate scheme to escape paying profits to the minority share holders. One year later the land was repurchased from the buyer(his friend, with whom he arranged the whole thing) and placed the asset in his name. The minority share holders of this company are left with worthless shares totaling 48% of the company shares.They were kept in the dark about the whole thing and now want the $ value of their shares with the profits this man has gone on to make following several real estate transactions. Two questions: Is there a real chance of making a successful $ claim ? and was what the majority share holder do considered fraud by law in the province of Quebec? The company was formed in 1988 in Quebec.
What you describe is forbidden by corporate law in every jurisdiction with which I'm familiar. I don't know the law in Quebec, but in principle:
An entity in control of a corporation can't use that control to unjustly enrich himself at the expense of other shareholders. (If he does so through deceit then he is committing the common law tort of fraud, and quite likely a criminal offense.)
A trustee or fiduciary that uses his control of assets to enrich himself at the expense of those to whom he owes a duty (e.g., minority shareholders) is guilty of various statutory offenses, among which may be "Breach of Fiduciary Duty" and "Fraudulent transfer."
Sales of corporate assets in general must be done through an "arms-length" mechanism. If they are being auctioned off, and the auction isn't open, so that an insider is able to purchase them below "fair market value," then, once again, a fraud has been committed. The grading and remedies vary by jurisdiction.
Of course, whether it's worth pursuing a remedy through legal action depends (as always) on:
- the amount at stake,
- the cost of pursuing the remedy,
- statutory allowances for punitive damages,
- the likelihood and cost of collecting on any judgement won.
Only a lawyer familiar with the jurisdiction, the complaint, and the corporation's governing documents could help you answer that question.