Maslon helped a closely held, North Carolina-based company and its CEO ("the client") resolve a complex business dispute involving a pre-revenue, Minnesota-based startup company in which our client was both a minority shareholder and a first-priority secured lender.

We first represented our client when it initiated a state court receivership proceeding after the startup defaulted on its debt obligations to our client and was unable to operate without additional financing. In addition to holding a minority equity position, our client had extended millions in first priority secured loans to keep the startup operating. Using its first-priority liens to credit its bid, our client purchased the startup’s assets out of the receivership, with the court’s approval.

After unsuccessfully challenging the asset sale, two individual minority shareholders and second-priority lienholders filed a lawsuit in Minnesota state court alleging that our client wrongfully leveraged the receivership proceeding to eliminate other investors’ interests and improperly prioritize its own recovery. Plaintiffs’ six-count complaint asserted direct and derivative claims for breach of fiduciary duty, aiding and abetting, and tortious interference.

Shortly after the case was filed, we successfully removed it to Minnesota federal court, where we vigorously asserted our client’s position that plaintiffs’ claims failed as a matter of law. For the CEO, we challenged personal jurisdiction, and for the company, we argued it owed no fiduciary duties as a minority shareholder and creditor acting in its own interest. Further, we argued that Delaware law—under which the startup was incorporated—generally does not impose fiduciary duties on minority shareholders absent control, and that creditors may enforce contractual rights after default without creating fiduciary obligations.

In December 2025, just six months after plaintiffs filed suit, the court granted our motion to dismiss in full. The court held that it lacked personal jurisdiction over the CEO, rejecting the CEO’s argument that his Minnesota contacts should be disregarded in the personal-jurisdiction analysis but finding that the company’s corporate activities in Minnesota did not meet the traditional minimum-contacts standard. The court held that plaintiffs failed to state a claim with respect to the company, and more specifically, that they failed to plausibly allege that our client owed fiduciary duties or engaged in independently wrongful conduct.

Amy Swedberg represented the closely held company in purchasing the startup’s assets in the receivership proceeding, with Leah Kippola-Friske representing the company and its CEO in the subsequent litigation.