The Michigan Business Law JOURNAL CONTENTS Volume 40 Section Matters Issue 3 From the Desk of the Chairperson 1 Fall 2020 Officers and Council Members 3 Committees and Directorships 4 Columns Taking Care of Business: An Interview with LARA Director Orlene Hawks Alexis Derrossett 6 Tax Matters: The Wealthy Facing New IRS Enforcement Programs— The Time Is Now to Prepare Eric M. Nemeth 8 Technology Corner: Business Continuity Lessons from the Pandemic Michael S. Khoury and Stuart A. Panensky 10 Touring the Business Courts Douglas L. Toering and Emily S. Fields 12 In-House Insight: Contract Issues in Closely Held Companies Gerard V. Mantese and Jordan B. Segal 14 Articles Oppression Claims and Limitations of Actions Justin Klimko, James Bruno, Jonathan Kirkland, and Paul Howarah 18 Shareholders’ Ability to Contractually Eliminate Oppression: The Uncertain Meaning of the Last Sentence of the Shareholder Oppression Statute Bruce W. Haffey and Michael K. Molitor 24 Restoring Balance to the MBCA: Shareholder Oppression and Derivative Actions Daniel D. Quick 30 Shareholder Oppression Litigation—A National Perspective Gerard V. Mantese and Fatima M. Bolyea 38 Can Michigan Courts Apply Discounts When Determining the “Fair Value” of Minority Shares in a Share Buyback Remedy Under Michigan’s Shareholder Oppression Statutes? Matthew P. Allen 47 Insider Trading—Fed’s Employ More Effective Weapon Stuart Sinai 54 Oppression and Employment—Clearing Up Muddied Waters Paul A. McCarthy 62 Published by THE BUSINESS LAW SECTION, State Bar of Michigan The editorial staff of the Michigan Business Law Journal welcomes suggested business law topics of general interest to the Section members, which may be the subject of future articles. Proposed business law topics may be submitted through the Publications Director, Brendan J. Cahill, The Michigan Business Law Journal, 39577 Woodward Ave., Ste. 300, Bloomfield Hills, Michigan 48304, (248) 203-0721, [email protected], or through Kanika S. Ferency, ICLE, 1020 Greene Street, Ann Arbor, Michigan, 48109-1444, (734) 936-3432, [email protected]. General guidelines for the preparation of articles for the Michigan Business Law Journal can be found on the Section's website at http://connect.michbar.org/businesslaw/newsletter. Each issue of the Michigan Business Law Journal has a different primary, legal theme focused on articles related to one of the standing committees of the Business Law Section, although we welcome articles concerning any business law related topic for any issue. The deadlines for submitting articles are as follows: Issue Article Deadline Summer 2021 March 31, 2021 Fall 2021 July 31, 2021 Spring 2022 November 30, 2021 Summer 2022 March 31, 2022 ADVERTISING All advertising is on a pre-paid basis and is subject to editorial approval. The rates for camera-ready digital files are $400 for full-page, $200 for half-page, and $100 for quarter page. Requested positions are dependent upon space availability and cannot be guar- anteed. All communications relating to advertising should be directed to Publications Director, Brendan J. Cahill, the Michigan Business Law Journal, 39577 Woodward Ave., Ste. 300, Bloomfield Hills, MI 48304, (248)203-0721. MISSION STATEMENT The mission of the Business Law Section is to foster the highest quality of professionalism and practice in business law and enhance the legislative and regulatory environment for conducting business in Michigan. To fulfill this mission, the Section shall: (1) expand the resources of business lawyers by providing educational, networking, and mentoring opportunities; (2) review and promote improvements to Michigan's business legislation and regulations; and (3) provide a forum to facilitate service and commitment and to promote ethical conduct and collegiality within the practice. The Michigan Business Law Journal (ISSN 0899-9651), is published three times per year by the Business Law Section, State Bar of Michigan, 306 Townsend St., Lansing, Michigan. Volume XXII, Issue 1, and subsequent issues of the Journal are also available online by accessing http://connect.michbar.org/businesslaw/newsletter From the Desk of the Chairperson By Julia A. Dale This fall marks a new fiscal year for portunity for growth. In 2019, we had a total of 3,089 the Business Law Section and another members, the vast majority of which were Michigan insightful issue of the Michigan Busi- residents. Only 5.5% of our membership was from out- ness Law Journal. As the recently elected side of Michigan and, of those, very few (12) were from Chair of the Section, I am privileged to outside of the United States. Of the total membership, lead one of the largest, most thought- only 21% were millennials, and less than one quarter ful, and active sections of the State Bar. (641) were female. While the number of women within The section has served Michigan Busi- the section is relatively small, I am happy to say that the ness Law attorneys for over 50 years and will continue section has a rich history of elevating women leaders at to do so diligently in new and innovative ways. the committee, council, and board levels. I want to acknowledge our immediate past Chair, Available section demographics are not limited to Jennifer Consiglio. Under her direction, the section gender and generation. A particularly salient measure- navigated deep and troubling waters with wisdom ment in this moment is the racial and ethnic diversity and grace. Indeed, Jennifer closed her first letter in the of the section and the opportunity for growth there. In Fall 2019 issue of the Michigan Business Law Journal by 2019, approximately 2000 section members provided promising that the section would be “poised to nimbly detail regarding their race/ethnicity. Not surprisingly, address the unknown challenges, developments and nearly 85% of our membership identified as of European opportunities that are sure to arise this coming year.” origin, but the numbers by group diminish significantly She honored this commitment, and I am grateful for her from there. Only 3.2% (63) of the responsive member- prescience and ability to stay the course. ship identified as of African origin, 3% (60) identified as In the midst of the disruption and interruption of Arab origin, 2.6% (52) identified as Asian/Pacific Is- caused by the pandemic, Jennifer pivoted and worked lander, 1.4% (28) identified as of Hispanic-Latino origin, in concert with the Business Law Section Council, Pro- and 0.4% (8) identified as of American Indian origin. grams Directorship, State Bar, as well as the Institute of These numbers contrast greatly with the demograph- Continuing Legal Education to host both the 2020 An- ics (from the same time period) for the Young Lawyers nual Meeting and 32nd Annual Business Law Institute Section, which consists of more than 8,000 active mem- virtually. bers. Almost half of that section (45%) was female, and As we move toward the new year, I am excited about over 33% identified as something other than of Euro- the team with which I will be serving and the oppor- pean origin. tunities ahead of us. While the long-term impact of the The Business Law Section is well represented (with pandemic on our clients, communities, and businesses 600 active members) within its ranks. It is closely fol- remains uncertain, there exists for us the opportunity to lowed by the Litigation (519 active members), Real usher in a new era. The section’s mission to foster the Property Law (507 active members), Criminal (496 ac- highest quality of professionalism and practice in Busi- tive members), and Probate and Estate Planning (486 ac- ness Law and to enhance the legislative and regulatory tive members) sections. environment for conducting business in Michigan re- As Chair, I propose four objectives informed by these mains the same, yet today we are uniquely positioned demographics: 1) an increase in the breadth and depth to see this fulfilled with previously unused, underused, of our membership; 2) an expansion of our online mem- and improved technologies. bership services/offerings; 3) implementation of a com- Now is also an excellent time to focus on growing prehensive social media strategy; and 4) development of our section membership, increasing engagement, and a Virtual Operations Plan. Each of these objectives pres- broadening our virtual operations as well as our online ents a challenging goal in a season of weakened reve- offerings. Our members know the multitude of resourc- nues, stretched human resources, and a growing fatigue es provided within this rich community, and we are with all things online. However, I believe the successful committed to communicating and demonstrating this implementation of the last three objectives will have a value to those who are not yet members. significant impact on the first. This section’s most important asset is found in its By my count, I will be the ninth woman to serve as membership and their extensive knowledge of Business Chair of Business Law Section. I am also the first non- Law. When the membership is deliberate in their en- White, Hispanic Chair, a mantle I carry with pride. gagement, networking, and mentoring efforts, this asset I remember over ten years ago, I was introduced to multiplies and expands beyond our immediate sphere the section by former Chair, G. Ann Baker, my mentor of influence. and former boss. While at the time I do not believe I ap- Demographics for section membership provided preciated all that the introduction would mean for me, by the State Bar of Michigan make clear that, while our my affinity for the section and its members has grown section is one of the largest, there is still plenty of op- by leaps and bounds over the last decade. From the early 1 2 THE MICHIGAN BUSINESS LAW JOURNAL — FALL 2020 days of my membership to my current role as Chair there have been countless opportunities to lead and serve.