Q: What acts constitute breach of fiduciary duty in New York?
Understanding what constitutes a breach of fiduciary duty in New York is not always easy. Each case is decided on an individual basis, based upon the unique facts and circumstances surrounding the claim. In general, for a breach to have occurred, the fiduciary must have engaged in self-dealing or placed his or her own interests above those of the company.
A recent example of a breach of fiduciary duty claim in New York involves corporate entity Tyco and former chief executive officer Dennis Kozlowski. Kozlowski was found liable for breach of fiduciary duty after committing the following acts:
- Giving himself illegal bonuses from the company
- Forgiving millions of dollars in loans to himself from the company
- Manipulating the company’s stock price by lying about the state of the company’s finances
The company recently reached a settlement with Kozlowski for an undisclosed sum.
Other examples of a breach of fiduciary duty may include:
- An employee who incorporates a competing business while on company time
- An employee who sends his employer’s clients or employees to work with another company
- A director who steals from a corporation
- A business partner who takes an action that places his own best interest above that of the company, to the detriment of the company and his partner
Although understanding the laws surrounding breach of fiduciary duty are complex, an experienced New York business litigation attorney can help you understand your legal rights and maximize your chances for obtaining a recovery. For more information, call our office today at (888) 497-3410. We are pleased to offer a free consultation.