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Breach of Fiduciary Duty
Directors
have a duty to manage. In managing the corporation, Directors
are protected by the Business Judgment Rule, which presumes
that Directors manage the corporation in good faith and in the
best interests of the corporation and its shareholders. As such,
Directors will not be liable for innocent mistakes of business
judgment.
However, Directors, as well as Officers and others, including
accountants and attorneys, have a fiduciary relationship to
corporations. As fiduciaries, these individuals are required
to abide by the legally defined duties of care, independence
and loyalty.
Under the duty of care, these fiduciaries must use reasonable
and prudent business judgment in making decisions that affect
the corporation and its shareholders. Under the duty of loyalty,
these fiduciaries may not unfairly benefit personally and to
the detriment of the corporation or its shareholders from business
decisions. A fiduciary found guilty of usurping a corporate
opportunity could have his profits disgorged and losses to the
injured corporation recouped in addition to receiving other
legal sanctions.
Our attorneys are experienced in counseling corporate clients
in the establishment of processes for making business decisions
and in evaluating possible conflict of interest scenarios. We
defend our corporate clients' management from allegations of
breaches in fiduciary duties as well as press claims on their
behalf when former employees and agents breach their fiduciary
duties to the corporation.
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