What are Common Squeeze-Out Techniques?

A “squeeze-out” is an action taken by majority or controlling shareholders to reduce or eliminate a minority shareholder’s interest in a closely held corporation. This is true in the context of other closely held business entities such as limited liability companies and limited partnerships as well.

Common squeeze-out techniques include:

Squeeze-out techniques are used by majority or controlling shareholders to “lock in” a minority shareholder for two basic reasons: (1) to force a sale of a minority interest at less than a fair price and, (2) to “freeze out” the minority of a fair return on his or her investment.