## Facts

- Atlas Food Systems & Services, Inc. was a closely held, family-run vending and food-service company incorporated in the 1950s.
- John A. Kiriakides and Louise Kiriakides were elderly minority shareholders (about 37.7% and 3% respectively); Alex Kiriakides, Jr. was the majority shareholder (about 57.68%) and long-time controller of corporate finances and governance.
- After a rift developed in 1995, Alex used his control to reduce the minority’s role and economic return from ownership.
- Alex removed John from the presidency, installed Alex’s son, and effectively excluded John and Louise from management participation.
- Atlas ceased paying dividends to the minority despite substantial cash and apparent capacity to make distributions, while compensation and benefits to Alex and his side of the family continued.
- Alex unilaterally reversed or altered corporate decisions (including tax-status decisions) without meaningful minority participation.
- Atlas made buyout offers the courts viewed as grossly undervaluing the minority shares, after actions that depressed the minority’s practical ability to realize value.
- John and Louise sued seeking an accounting and equitable relief under the judicial-dissolution statute, including a compelled purchase of their shares.

## Issues

1. Whether the majority shareholder’s conduct constituted “illegal, fraudulent, oppressive, or unfairly prejudicial” conduct toward minority shareholders under South Carolina’s judicial-dissolution statute.
2. Whether “oppressive” or “unfairly prejudicial” conduct may be evaluated by reference to minority shareholders’ objectively reasonable expectations in a closely held family corporation.
3. Whether a compelled buyout at fair value is an appropriate remedy in lieu of dissolution, and how the remedy should be framed.

## Decision

- The Supreme Court of South Carolina affirmed the result granting minority-shareholder relief, as modified.
- The Court agreed the majority’s actions amounted to oppressive and unfairly prejudicial conduct consistent with a squeeze-out pattern in a close corporation.
- The Court approved equitable relief short of dissolution, including a buyout of the minority’s shares.
- The Court modified the analytical framework used below, refining how reasonable expectations inform the oppression/unfair-prejudice inquiry and how remedy considerations are applied.

## Legal Principles

- In closely held corporations, majority conduct may warrant judicial relief when it is illegal, fraudulent, oppressive, or unfairly prejudicial to minority shareholders under the dissolution statute.
- “Oppression” and “unfair prejudice” can include squeeze-out tactics that deny the minority participation and economic benefits while the majority retains control-side benefits.
- Minority “reasonable expectations” are relevant but must be objectively reasonable and grounded in the corporation’s history, structure, and established practices; disappointed expectations alone do not establish oppression.
- Courts may order equitable remedies short of dissolution, including a compelled purchase of minority shares at fair value, to address majority misconduct while preserving a viable business.

## Conclusion

The court upheld relief for minority shareholders who were squeezed out through exclusion from management, cessation of distributions, and unfair buyout pressure, and confirmed that objectively reasonable expectations may inform an oppression analysis while endorsing a fair-value buyout as an equitable alternative to dissolution.


Kiriakides v. Atlas Food Sys. & Servs., Inc., 343 S.C. 587, 541 S.E.2d 257 (S.C. 2001)