Blogs > Shareholder Disputes in New Jersey

If Your Partner Won’t Give You (Accurate) Information, Subpoena the Accountant

Subpoena Accountant - Business Partner Breaking the Law

The key to winning a shareholder oppression case can sometimes be as simple as getting the information you need; and the key to that can sometimes be a reluctant accountant. Often, the company’s accountant will have the key to the case because he or she knows “where the bodies are buried.”

If you are a passive investor, with no direct access to financial information, it may seem as if you have no choice but to take your business partner’s word as to the state of the company. If you suspect that the books are not accurate, how can you test your suspicions, with only your business partner to supply you with accurate records?

Subpoena the Accountant

Often the accountant will respond to your request for information by saying he cannot release information or respond to inquiries without the majority shareholder’s permission. But once business divorce litigation is filed, you have the power of a subpoena to compel not only the production of actual accurate financial information but also the accountant’s deposition.

In many cases, cocky majority shareholders believe they can get away forever with stonewalling document requests, and even providing documents that on their face could not possibly be accurate. However, what such unscrupulous actors fail to count on is the limits of his accountant’s loyalty.

A “shady” accountant may be perfectly willing to help stonewall minority shareholders from receiving documents, and to submit “creative” tax returns to the IRS. But to lie under oath and commit perjury in a deposition for a majority shareholder is simply asking too much. A CPA who knowingly lies under oath in a deposition is literally putting his accounting license on the line, and most often will do whatever possible to avoid being placed in that position. But once he is, the majority shareholder who has been deceiving his business partner is taking a huge risk if he expects his accountant to lie under oath.

Business Divorce Litigation

If approached correctly, your business partner can be made to see that everything leaves a paper trail – or an electronic footprint – and that nothing can be hidden forever. Instead of allowing him to hide behind his accountant, or the accountant to hide behind confidentiality, putting the accountant front-and-center early on can go a long way toward making sure the information you are getting is accurate.

In Latin, subpoena literally means “under pain.” A subpoena to the company’s accountant out-of-the-box can often live up to its word origin. If you have any questions about this post, oppression litigation, or any other related business law matters, please feel free to contact me at