Posts Categorized: Fiduciary Duties

Posted: April 12, 2017

No Conspiracy to Breach Fiduciary Duty Claim When Underlying Tort Not Alleged

On March 29, 2017, Justice Oing of the New York County Commercial Division issued a decision in Siras Partners LLC v. Activity Kuafu Hudson Yards LLC, 2017 NY Slip Op. 50443(U), dismissing a civil conspiracy claim because the underlying tort was not alleged, explaining: While New York does not recognize an independent cause of action... Read more »

Posted: April 11, 2017

Collateral Manager Not Entitled to Expense Payments Greater Than Provided by Contract

On March 31, 2017, Justice Kornreich of the New York County Commercial Division issued a decision in Commonwealth Advisors, Inc. v Wells Fargo Bank, N.A., 2017 NY Slip Op. 30622(U), holding that the collateral manager of a CDO was not entitled to expense reimbursements greater than were provided in the agreements governing the CDO, explaining:... Read more »

Posted: April 7, 2017

Negligent Representation Claim Fails; No Special Relationship

On April 4, 2017, the First Department issued a decision in Coöperative Centrale Raiffeisen-Boerenleenbank B.A., “Rabobank Intl.,” N.Y. Branch v. Atradius Credit Ins. N.V., 2017 NY Slip Op. 02606, affirming the dismissal of a claim for negligent misrepresentation, fraudulent concealment, and breach of fiduciary duty because there was no special relationship between the parties, explaining:... Read more »

Posted: February 6, 2017

LLC Member Does Not Owe Fiduciary Duty To Managing Member Or To The LLC Itself

On January 31, Justice Singh of the New York County Commercial Division issued a decision in Landes v. Provident Realty Partners II, L.P., 2017 NY Slip Op. 30196(U), denying and granting summary judgment motions made by the parties. The underlying dispute involves the relationship between several LPs and LLCs holding indirect interests in real property.... Read more »

Posted: December 21, 2016

Escrow Agent Has Fiduciary Duty to Persons With a Beneficial Interest in the Escrowed Property

On December 14, 2016, the Second Department issued a decision in Sasidharan v. Piverger, 2016 NY Slip Op. 08387, holding that an escrow agent has a fiduciary duty, explaining: An escrow agent not only has a contractual duty to follow the escrow agreement, but additionally becomes a trustee of anyone with a beneficial interest in... Read more »

Posted: November 30, 2016

Board Did Not Breach Fiduciary Duty By Entering Into Management Contract With Former Employees

On November 22, 2016, the First Department issued a decision in Doppelt v. Denahan, 2016 NY Slip Op. 07868, holding that directors did not breach their fiduciary duty by entering into a management contract with former employees, explaining: Contrary to the argument advanced by plaintiff, a shareholder who seeks to bring a derivative action on... Read more »

Posted: November 27, 2016

Party Who Agreed to Be Tie-Breaker Vote for LLC Members Had Fiduciary Duty to Members

On November 21, 2016, Justice Ritholtz of the Queens County Commercial Division issued a decision in Fakiris v. Gusmar Enterprises, LLC, 2016 NY Slip Op. 51665(U), holding that a person who had agreed to be the tie-breaker in votes between two LLC members had a fiduciary duty to those members, explaining: The second cause of... Read more »

Posted: November 23, 2016

Former Employees Can be Ordered to Repay Salaries under Faithless Servant Doctrine

On November 22, 2016, the First Department issued a decision in Beach v. Touradji Capital Management, LP, 2016 NY Slip Op. 07852, holding that former employees that formed a competing company could be held liable for breach of fiduciary duty, explaining: Although plaintiffs were at-will employees, they could be found to have breached a fiduciary... Read more »

Posted: November 1, 2016

Managing Member of LLC Has Fiduciary Duty to Both LLC and Other Members

On October 11, 2016, Justice Friedman of the New York County Commercial Division issued a decision in Zacharias v. Wassef, 2016 NY Slip Op. 31897(U), holding that the managing member of an LLC had fiduciary duties to both the LLC and the other members, explaining: [A]s a member who exercised managerial control over Mechanical, Wassef... Read more »