Resolve Your Business Disputes After A Breach Of Fiduciary Duty
Business partners must uphold certain standards in their dealings. As fiduciaries, they must act in the interests of the business rather than their own personal interests. Partners, executives, managers, general partners and board members are all subject to three important standards:
- Duty of loyalty: Business fiduciaries cannot engage in conflicts of interest or self-dealing.
- Duty of care law: Fiduciaries must exercise reasonable care and competence in business-related decisions.
- Duty to make full disclosures: Fiduciaries must be open and upfront about the business’s finances.
How do these duties apply to specific situations? The answer isn’t always black or white. There is breach of fiduciary duty. The partnership agreement, corporate bylaws, shareholders’ agreement, operating agreement or other foundational documents will factor into the equation. As a result, this key question requires a case-by-case analysis rooted in detailed knowledge of the law.
Breach Of Fidiciary Duties And Remedies
When a business partner breaches one of these duties, the others may have the right to seek legal recourse. The remedies available depend on the type of breach. The business may be able to recover lost funds, invalidate improper contracts or benefit from a constructive trust, for example.
Fiduciary claims can also arise in the estate planning context. Trustees and executors are bound by fiduciary duties similar to those of business partners. When they fail to uphold these duties or engage in self-dealing, they can be held liable through legal action.
Knowledgeable Guidance On Fiduciary Liability
At the Dallas law firm of Stephen Kaplan, P.C., we understand the nuances of fiduciary liability in Texas. Our attorney handles breach of fiduciary duty claims on behalf of members, shareholders, executives, managers, boards of directors and other interested parties. We represent plaintiffs seeking recourse for another’s breach. Additionally, we defend clients against fiduciary claims. This well-rounded background — as well as our attorney’s nearly 40 years of experience in the business law field — gives us the ability to anticipate how both sides approach these complex issues.