Sale of Gotham Bank Possibly a Breach of Fiduciary Duty
Posted on Jan 01, 2016
An investigation has been launched to discover if there is a breach of duty lawsuit possible in the sale of Gotham Bank of New York to Provident New York Bank Corp. The investigation will seek to discover if the Gotham Bank’s Board of Directors was able to secure the best possible outcome for its shareholders.
A fiduciary duty relationship is in place when the two parties involved require a heightened level of trust and vulnerability. This could include financial advisors, real estate brokers, attorneys, and bankers. There is no law that states exactly which business relationships count as fiduciary, and each case is looked at individually by the courts.
The shareholders of Gotham Bank of New York will receive payment for the value of their shares based on a complicated formula that incorporates current price, projections, and outstanding shares of the company. This is the accepted practice in the buyout of a publicly traded company, but the investigation will look into whether or not this is the best outcome for the shareholders.
The investigation will attempt to uncover whether or not Gotham Bank’s Board of Directors properly shopped the market to acquire the best deal for their shareholders—the people with money on the line with this company. If it is shown that the Board did not spend adequate time or resources researching options, and Provident New York Bank Corp is not paying fair value in the transaction, Gotham Bank may be in breach of fiduciary duty.
Questions regarding this investigation and issues of breach of fiduciary duty can be fielded by a New York fiduciary duty lawyer at the Law Offices of Jonathan M. Cooper.