[btilly]

Would it have all suddenly been illegal if "the client" only owned 49%? I'm very curious about how this all works.

In my non-lawyerly understanding, basically yes. Here is the theory.

If I own something, and you act to deprive me of my rights, then you are a thief and I am allowed to take certain kinds of action to assert my rights. But if I take action and you dispute that I have those rights, then you are allowed to take action of your own up to and including invoking the legal process. What kinds of action are allowed is a matter of local law. For instance threatening bodily harm is not allowed, but taking control of key systems is.

In this case, the act of selling 51% of the company that you run means that you have agreed that the buyer can make decisions under specified conditions, even though you created it and may still be running it. That agreement is why you were paid a (hopefully large) sum of money.

By contrast if you sell 49% of the company, you have agreed to many things, but not that.

There are many cases where sales might come with complex conditions about when someone has veto power over certain decisions. That is why a legal review would have been needed in this case to verify that they were OK to proceed. But fundamentally you agree to a contract about how decisions will be made, and are then bound by it.

[btown]

Specifically, in certain states, my understanding is that a majority of the shareholders could take action at any point to permit any actions taken by Colbaltix, amending bylaws as necessary to bypass, say, any requirements for unanimous board decisions. I am not a lawyer, but there's a huge difference between 49% and 51%.

[NickNameNick]

I would hope that votes to amend the company charter would be subject to quorum requirements.

You shouldn't be able to have one faction of the company ownership hold a board meeting, not allow the rest of the board to be represented, and declare all of your subsection's decisions as being unanimous.