Posts Categorized: Fiduciary Duties

Posted: July 15, 2016

Prior to Default, RMBS Trustees Owe Note Holders Extracontractual Duty to Perform Basic Functions

On July 5, 2016, the First Department issued a decision in Commerce Bank v. Bank of N.Y. Mellon, 2016 NY Slip Op. 05339, holding that prior to a default under a pooling and servicing agreement, an RMBS trustee owed note holders extra-contractual duties. In Commerce Bank, the First Department considered a number of issues on... Read more »

Posted: April 15, 2016

Business Judgment Does Not Protect Decision Where Some Partners Benefited Differently Than Others

On April 12, 2016, the First Department issued a decision in Pokoik v. Norsel Realties, 2016 NY Slip Op. 02740, reversing dismissal of claims against managing members based on the business judgment rule, explaining: Plaintiffs sufficiently alleged that Steinberg and Lieberman were conflicted and stood to benefit personally, in a manner other than as shareholders... Read more »

Posted: March 29, 2016

Six-Year Statute of Limitations Applies to Breach of Fiduciary Duty Claims Sounding in Fraud

On March 15, 2016, the First Department issued a decision in Cusimano v. Schnurr, 2016 NY Slip Op. 01758, holding that a claim for breach of fiduciary duty based on fraud has a six-year statute of limitations, explaining: Contrary to the motion court’s conclusion, we find that a six-year statute of limitations applies to the... Read more »

Posted: January 23, 2016

Controlling Shareholders Did Not Have Fiduciary Duty to Minority Shareholder

On January 12, 2016, the First Department issued a decision in Arnett v. Charles Morgan Securities Inc., 2016 NY Slip Op. 00130, holding that controlling shareholders did not have a fiduciary duty to a minority shareholder, explaining: Plaintiff does not dispute defendants’ contention that Nevada, where EGI was incorporated, does not recognize a fiduciary duty... Read more »

Posted: December 31, 2015

Taking or Copying Customer Lists is Breach of Fiduciary Duty Even if Not Trade Secrets

On November 21, 2015, Justice Grays of the Queens County Commercial Division issued a decision in Pavers & Road Builders District Council Welfare Fund v. Briceno, 2015 NY Slip Op. 32415(U), explaining that even if they are not trade secrets, it is a breach of fiduciary duty for an employee to take customer lists. In... Read more »

Posted: November 30, 2015

Client Q&A: I am a shareholder in a family-owned business. I think that CEO of the company has been taking advantage of us. Besides firing her, is there anything we can do?

By John M. Lundin Shareholders own the corporation, but the directors and the officers they employ run it. Making sure that corporate officers act in the best interests of the shareholders, who own the company, rather than themselves, is one of the fundamental problems of corporate law. Fiduciary Duties A corporate officer has a fiduciary... Read more »

Posted: August 11, 2015

Action May Be Brought Against Accountants For Failing To Disclose Client’s Employee’s Financial Wrongdoing

On July 21, 2015, Justice Demarest of the Kings County Commercial Division issued a decision in JAG Orthopedics, P.C. v. AJC Advisory Corp., 2015 NY Slip Op. 51111(U), denying most of defendants’ motion to dismiss. In this action, plaintiff’s doctor-principal discovered that his office manager had embezzled money by misusing a company credit card and... Read more »

Posted: November 15, 2014

Former Employees Preliminarily Enjoined from Carrying On New Business

On November 3, 2014, Justice Whelan of the Suffolk County Commercial Division issued a decision in First Manufacturing Co., Inc. v. Young, 2014 NY Slip Op. 51562(U), enjoining former employees from carrying on a new business they set up while working for their former employer. In First Manufacturing Co., the plaintiff wholesaler of leather sought... Read more »