Balvik v. Sylvester
In Balvik v. Sylvester, 411 N.W.2d 383, 389 (N.D. 1987), a former vice president of a close corporation brought an action against the majority shareholder and the corporation board of directors, seeking the corporation's dissolution by the court or, alternatively, the payment of the true value of his stock.
The district court ordered dissolution of the corporation.
On appeal, the Court held the district court abused its discretion in dissolving the corporation, explaining:
"We have recognized that forced dissolution of a corporation is a drastic remedy which should be invoked with extreme caution and only when justice requires it. In a sense, a forced dissolution allows minority shareholders to exercise retaliatory "oppression" against the majority. Although 10-21-16, N.D.C.C., mentions only dissolution as a remedy for oppressive conduct, we agree with those courts which have interpreted their similar statutory counterparts to allow alternative equitable remedies not specifically stated in the statute." Balvik, 411 N.W.2d at 388.
In Balvik v. Sylvester, under a prior statute identifying dissolution as the only remedy for oppressive conduct by those in control of a corporation, the Court concluded a trial court abused its discretion in ordering the extreme and unduly harsh remedy of dissolution.
The Court cited several alternative remedies and concluded the appropriate remedy in that case was ordering one of the shareholders to buy the other shareholder's stock for fair value. Id. at 388-89.