Breach of Fiduciary Duty in a Business: Common Warning Signs
By Dion Macbeth, California attorney
Fiduciary duties require certain decision-makers to act with loyalty and care. When trust breaks down, a prompt and fact-based review can protect both the business and the people involved.
Conflicts deserve careful documentation
Red flags may include undisclosed related-party transactions, diversion of opportunities, unusual compensation, selective access to information, or decisions that benefit one owner at the company's expense. Save governing documents and contemporaneous records.
The remedy depends on the harm
Possible responses include disclosure and ratification, an accounting, injunctive relief, damages, governance changes, or a negotiated separation. Accusations made before the facts are developed can make resolution harder.
Common Questions
Further Detail
The answer depends on the entity, role, agreements, ownership relationship, and applicable law. Directors, officers, managers, partners, and controlling owners may have different duties.
Contracts, financial records, board minutes, communications, valuations, and evidence of the decision-maker's relationship to the transaction can all matter.
Legal Guidance
Discuss This Matter With Harrington Wells
Contact Harrington Wells to request an initial review. The firm will determine whether the matter falls within its current scope and capacity.
Related practiceBusiness LitigationRequest ConsultationThe information provided does not constitute legal advice and does not create an attorney-client relationship.