In Wilson v. Gandis (S.C. June 3, 2020), the South Carolina Supreme Court delivered a sweeping decision that addresses not only minority-member oppression in an LLC context but also draws important lines in trade secret claims—especially under the South Carolina Trade Secrets Act.d
Because I represented David Wilson, I view the opinion as both a vindication of principled advocacy for fairness in partnership disputes and a cautionary roadmap for trade secret plaintiffs. In this post I’ll walk through the facts, rulings, and implications; in a follow-up, I’ll zero in on one sub-issue that deserves its own full analysis.
The Facts & Procedural Posture
Wilson and Gandis (later joined by Andrea Shirley) formed Carolina Custom Converting, LLC (“CCC”) in 2007 (or thereabouts), each originally holding 50%. Over time, Wilson wound down his prior business (EFS) and folded much of its customer base into CCC, on the agreement that he would receive monthly compensation.
Shirley was brought in later (in return for a 5% interest) to provide accounting/formation advice, but soon became more deeply involved. In time, Gandis and Shirley began excluding Wilson from operations, withholding compensation and tax distributions, changing rent terms (CCC used property owned by Gandis’ other entity), locking him out of premises, and forming a competing venture (ZOi).
Wilson sued for oppressive conduct (seeking a forced buyout), and CCC counterclaimed for fiduciary duty and trade secret misappropriation (alleging Wilson had copied customer/supplier contact data, inventory reference information, and shared them with Neologic / Fresh Water).
After a five-day bench trial with over 300 exhibits and 10 witnesses, the trial court sided with Wilson: it found Gandis and Shirley engaged in oppressive conduct, ordered them to purchase Wilson’s membership interest (valued at about $347,863.23), rejected the counterclaims, and held that CCC failed to prove its trade secret case.
On appeal, the Court of Appeals affirmed, and the Supreme Court granted certiorari. The S.C. Supreme Court affirmed as modified:
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It affirmed Wilson’s oppression claim and the buyout, but restructured the mechanism so that CCC as the entity is primarily obligated to purchase Wilson’s interest; only if CCC fails to do so would Gandis and Shirley be individually liable.
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It affirmed the dismissal of the trade secret claim against Wilson, Neologic, and Fresh Water, holding that CCC had not shown that the alleged information had independent economic value as a secret under the statute.
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It also dealt with issues of fiduciary duty (standing of Gandis & Shirley to assert them) and valuation/date of valuation.
Thus, Wilson v. Gandis is a hybrid case—oppression and trade secret—but one where the trade secret component reinforces a foundational principle: secrecy claims die without credible proof of value and protection.
Key Legal Lessons & Strategic Takeaways
Oppression as a Squeeze-Out Weapon
The opinion reaffirms that minority members can invoke statutory oppression (under the LLC Act, S.C. Code § 33-44-410) when majority members use unfair, exclusionary tactics. The court described Gandis’ and Shirley’s actions as a “script for minority oppression”—a coordinated campaign to strip Wilson of control and value.
For litigators, the case is a model of weaving documentary evidence (especially emails) with financial maneuvering (rent, withholding, restructuring) to paint the freeze-out narrative.
Standing & Derivative vs. Individual Claims
The court held that Gandis and Shirley lacked standing to individually assert fiduciary claims against Wilson, because any harm they claimed flowed only derivatively to CCC, not directly to them.
That is a useful boundary: co-members can’t always litigate side claims when the injury is corporate in nature.
Trade Secret Law: Independent Economic Value is Fatal
The Supreme Court’s summary rejection of the trade secret claim turned entirely on the independent value prong. The Court accepted the trial court’s finding (supported by evidence) that the customer/supplier/contact data and inventory program were not sufficiently secret or valuable because of secrecy. Rather, expert testimony showed that the industry routinely shared such data, that it was ascertainable via trade associations or public sources, and so lacked the necessary mystique.
This is a powerful moment: it reminds practitioners that no amount of complaining about “how special our data is” suffices unless you can anchor that value to the fact of secrecy.
Burden and Timing of Trade Secret Proof
Because trial was non-jury, the Supreme Court declined to grant deference to the trial court’s findings on legal matters, but did not disturb credibility assessments.
Also, the Court did not need to reach the defendant’s defenses of improper copying or lack of protective measures, because it resolved the threshold defect (lack of independent value)
That makes Wilson v. Gandis a strong precedent in your tool chest: attacking independent value can sometimes short-circuit the demand to litigate every detail of access, copying, or enforcement.
Mechanics of Buyout & Entity Liability
The Court’s modification—that CCC must first purchase Wilson’s interest—was not trivial. It shifts the burden to the entity itself, insulating majority members (to some degree) unless the LLC declines. That structure merits attention in all LLC oppression cases.
Also, the Court affirmed the valuation as of December 31, 2011 (just before the ouster tactics), rather than a later date. That selection was tied to fairness, since from 2012 on, Wilson was effectively locked out of influencing operations.
