An action taken by a firm's majority shareholders that pressures minority holders to sell their stake in the company. A variety of maneuvers may be considered freeze out tactics, such as the termination of minority shareholder employees or the refusal to declare dividends.
Also referred to as a "squeeze out".
Investopedia Says:
Freezing out is usually found in closely held companies, where majority shareholders can converse with one another. Majority shareholders attempt to freeze out the minority from the decision making process, rendering minority voting rights useless. Such actions are often illegal and may be overturned by the courts.
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