Minnesota’s Legislature and judiciary have demonstrated a high regard for promoting the business interests of corporations while protecting the rights of shareholders of private companies through the fair and equal application of the Minnesota Business Corporation Act (MBCA).
However, the relatively recent Minnesota Supreme Court decision in US Bank N.A. vs. Cold Spring Granite 802 N.W.2d 363 (2011) has caused some lawyers to question whether there is a “loophole” in the MBCA that will permit controlling shareholders to eliminate minority interests without providing statutory rights to which the minority have grown accustomed. The court blessed a corporate transaction under § 302 A.423 that forced minority shareholders to sell their shares without the benefit of dissenter’s rights or a fair value proceeding. The potential far-reaching effect of the court’s decision warrants careful attention.