A freeze out is the deliberate campaign to make your ownership worthless without buying it: distributions stop, your employment and salary end, information dries up, meetings happen without you, and eventually someone offers to take the shares off your hands cheap. If that sequence sounds familiar, you are not imagining it and you are not powerless. Florida law gives owners of closely held corporations and LLCs real weapons against a freeze out, but they work best when raised early, while the squeeze is still in progress.
Tell Aaron What Happened
Freeze outs are designed to make you feel like a bystander in your own company. The first conversation is about reversing that: what you own, what they have cut off, and which lever gets pulled first.
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When a Freeze Out Is Urgent
A freeze out is urgent in Florida when the endgame is visible: a lowball buyout offer with a deadline, a recapitalization or new share issuance that would dilute you, a merger or asset sale being arranged around you, or company money moving in ways you can no longer see. Any of those means the squeeze is entering its final phase, and the options narrow sharply after documents get signed. A deadline in hand is a same week call.
What a Freeze Out Looks Like in a Florida Company
A freeze out in a Florida closely held company follows a pattern, and naming the pattern matters because no single step looks illegal on its own. The usual sequence: distributions are cut while insider salaries rise, the minority owner is terminated from employment, board and member meetings stop or happen without notice, requests for financials are ignored, and the company starts doing business with entities the insiders own. Each step is explainable in isolation. Together they are the strategy, and Florida courts are permitted to look at the whole picture.
The Rights the Majority Hopes You Do Not Use
The rights that answer a freeze out in Florida start with information and end with liability. Owners of Florida corporations and LLC members hold statutory rights to inspect books and records under Chapters 607 and 605, and a records demand is usually the first formal move because it is fast, hard to refuse lawfully, and forces the insiders to choose between transparency and defiance. Beyond information, those in control of a closely held Florida company owe duties they violate by running it for themselves, and self dealing, diverted opportunities, and starvation tactics support claims both for the company and, in the right circumstances, for you directly. The freeze out strategy depends on the frozen out owner giving up. The claims exist precisely because many do not.
What Not to Sign and Not to Do
Do not sign a buyout, release, or consent under freeze out pressure before it is reviewed, because the paper you sign at the bottom of the squeeze is the whole point of the squeeze. Do not vent in writing to the other owners, do not remove company property, and do not stop showing up where you still have the right to be. Stay correct, stay documented, and let the pressure flow in the other direction through counsel.
What to Have Ready
Bring your share certificates or the operating agreement and any shareholder agreement, the last distributions you received and when they stopped, your termination paperwork if employment ended, every ignored request for information, and the buyout offer if one has arrived. A timeline of the squeeze, step by step with dates, is the backbone of the case.
What Happens Next
The typical opening is a formal records demand paired with a preservation letter, which changes the temperature immediately. What follows depends on what the records show and what the insiders do: negotiation toward a fair value exit, direct and company claims against those in control, or protective measures where value is actively leaking. The strategy is chosen with you, with the price of each path on the table.
Why Aaron Resnick
Aaron Resnick has been practicing in Florida since 1998, and representing owners squeezed inside closely held companies is core work for the firm. He has been named a Florida Super Lawyer every year since 2013, and his work has been covered by The New York Times, The Wall Street Journal, and the Miami Herald. A freeze out bets that you will not fight. Retaining counsel is how the bet starts losing.
Related Questions
Is a freeze out illegal in Florida?
The label is not what matters; the conduct is. Cutting distributions, self dealing, and information blackouts can each breach duties owed inside a Florida closely held company, and the combined course of conduct is what courts evaluate. That is why documenting the pattern beats arguing about any single decision.
They offered to buy my shares. Should I take it?
Not before the number is tested. Freeze out offers are priced against your exhaustion, not the company's value, and accepting one usually includes releasing every claim described on this page. Have the offer and the financials reviewed together, then decide.
Does this apply to LLC members or only corporate shareholders?
Both. Florida LLC members face the same squeeze mechanics and hold parallel rights under Chapter 605. The vocabulary changes, the strategy does not.
This page is general information, not legal advice. Reading it does not create an attorney client relationship with the Law Offices of Aaron Resnick, P.A. Every dispute turns on its own facts, documents, and deadlines.
