Of Breach of Fiduciary Duty This article examines four recurring indicia that courts consistently associate with breaches of fiduciary duty: self-dealing and secret profits, misappropriation or misuse of funds, manipulation of financial reporting and compensation structures, and the usurpation of corporate opportunities. Introduction Fiduciary duty cases rarely turn on abstract principles alone. Instead, courts look for concrete patterns of conduct that reveal whether a fiduciary has placed personal interests ahead of the party to whom loyalty is owed. In litigation, breaches of fiduciary duty often emerge through identifiable financial and operational red flags: undisclosed conflicts of interest, unexplained transfers of…
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April 2022 Two cases from Delaware and New York provide guidance to financial forensics and valuation professionals on the fiduciary duties that managers and directors owe to enterprises. The first case, In re: Multiplan Corp. Stockholders Litigation, is a class action arising from allegedly inadequate disclosure of a merger between a publicly traded special purpose acquisition company (SPAC) and a privately held operating company. The second case, The People of the State of New York v. The National Rifle Association, et al., is a civil action brought by the state attorney general against a nonprofit corporation and certain of its…