For the shareholders involved, the period of disagreement is
often stressful, resulting in their spending valuable time at
loggerheads with each other. This invariably creates an
inharmonious working environment often to the detriment of the
goodwill of the business and staff morale.
Ultimately the bickering shareholders may cause the business to
run into financial difficulty (if that itself has not been one of
the causes of the disagreement).
In most cases where the parties have to resort to their lawyers
or even the Courts to resolve their disagreement, we have found
that "off the shelf" shareholders agreements (on the
occasions when one has been put in place) are often unhelpful in
that either the dispute resolution provisions themselves are
inadequate and lack teeth (for example, negotiation and mediation
can be blunt instruments) or they do not properly address the
issues of deadlock between the shareholders. In short they do not
facilitate a quick resolution
