How Courts Explain and Describe "Fiduciary" Duties and Obligations Between Partners, Shareholders, and Members
To better understand how Courts define and describe the fiduciary duties owed between partners, shareholders and members, the following quotes - from court decisions - are helpful:
Business assets must be preserved and utilized for the exclusive benefit of the underlying business
A corporate fiduciary, partner, shareholder or member "is not permitted to derive a personal profit at the expense of the corporation…his dealings with respect to corporate assets are subject to close scrutiny and must be characterized by absolute good faith, he may not appropriate corporate assets or opportunities to himself or to a new corporation formed for that purpose". (In re Greenberg, 206 A.D.2d 963, 964)
Fiduciary duties of partners, shareholders, members, officers and directors
Directors and officers shall discharge the duties of their respective positions in good faith. They may not assume and engage in the promotion of personal interests which are incompatible with the superior interests of their corporation. Officers and directors of a corporation owe to it their undivided and unqualified loyalty. They should never be permitted to profit personally at the expense of the corporation. Nor must they allow their private interests to conflict with the corporate interests. These are elementary rules of equity and business morality. Courts of equity must never enforce strict compliance with these rule. (Foley v. D'Agostino, 21 A.D.2d 60, 66-67)
Central to the options that you will possess for managing and controlling your partnership dispute will be the underlying fiduciary duty and obligation that is owed to you from your partners. How you invoke these fiduciary rights and "frame" your dispute and litigation will impact everything.
To learn more about a proven course of action and plan to protect and defend your interests as a New York or New Jersey partner, shareholder or member, contact partnership and shareholder lawyer, Charles N. Internicola, Esq. at 800.976.4904.
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