In business, parties frequently assume the role of a fiduciary, which imposes various duties owed to the fiduciary’s principal – the party who benefits from the fiduciary’s services. When fiduciaries negligently or intentionally act against a principal’s interests – usually for the fiduciary’s benefit – the principal might pursue a legal claim to hold their fiduciary accountable for losses the principal has incurred.
When you find yourself facing a breach of fiduciary duty claim, get the legal help you need to protect your rights, reputation, and interests. Since 1946, the attorneys of Patrick, Harper & Dixon, LLP, have worked diligently to earn the respect of our neighbors in Hickory, NC. Our full-service firm provides high-quality legal representation to clients in breach of fiduciary cases and other business litigation matters. We represent clients ranging from individuals to large corporations, and our legal team will always take the time to listen to you and understand your needs, goals, and concerns. Our attorneys pride themselves on helping clients find solutions to their legal needs that allow them to improve their lives and businesses. We believe in building lasting relationships with our clients based on honesty, trust, and dedicated service.
Contact Patrick, Harper & Dixon, LLP, for an initial case evaluation with a seasoned business litigation attorney to discuss your legal options for pursuing a favorable outcome to your legal matter.
Understanding Fiduciary Duties in Business
A fiduciary duty refers to an ethical or legal requirement to act in another party’s best interests. One party may owe another fiduciary duties when they assume a position of trust or when the other party relies on them for advice or support or to act in the other party’s interests. In many business contexts, fiduciary duties can include:
- Duty of Care – The duty of care obligates a fiduciary to act reasonably on behalf of another party, which can include reviewing all material information before making a decision or taking action.
- Duty of Loyalty – The duty of loyalty requires a fiduciary to refrain from using the fiduciary relationship for their personal benefit and to avoid conflicts of interest.
- Duty of Good Faith – The duty of good faith requires fiduciaries to advance their principal’s interests by any legal means possible.
- Duty of Disclosure – The duty of disclosure can require a fiduciary to exercise complete honesty with the principal.
- Duty of Confidentiality – A fiduciary must keep their principal’s information private or confidential and refrain from disclosing that information to third parties for the fiduciary’s benefit.
What Constitutes a Breach of Fiduciary Duty
A breach of fiduciary duties occurs when a fiduciary violates one or more obligations owed to their principal. Breaches of fiduciary duties usually involve a fiduciary taking actions that somehow conflict with the principal’s best interests. In many cases, these conflicts may arise from the fact that the fiduciary has acted to benefit themselves to their principal’s detriment. A breach of fiduciary duty can give rise to a legal claim when the principal suffers some form of harm from the breach, such as financial expenses, injured reputation, or loss of business opportunities.
Examples of Breaches
Common examples of activity that may constitute a breach of fiduciary duties include:
- Corporate officers and directors negligently managing a business’s operations or failing to exercise reasonable oversight, including allowing the corporation to engage in illegal or unethical activities
- Negligent management or investment decisions
- Embezzling funds or assets entrusted to a fiduciary
- Demanding excessive compensation for services
- Usurping business opportunities
- Misappropriating entrusted property or assets, including using property or money for personal purposes
- Failing to disclose material information to principals or shareholders
- Frustrating shareholders’ exercise of their rights under corporate bylaws
Legal Consequences of a Breach of Fiduciary Duty
When a fiduciary breaches duties they owe to a business or other parties, the principal may file a civil claim to pursue financial and legal relief from the fiduciary. In a breach of fiduciary duty claim, a plaintiff may have the right to recover compensation for losses, such as lost profits or out-of-pocket costs of remedying a fiduciary’s negligence or mismanagement. When a fiduciary willfully breaches their duties, a judge or jury may also award the harmed principal punitive damages. Punitive damages do not compensate a harmed party for losses they incurred but instead punish the fiduciary for egregious behavior that shocks the conscience.
A court can also impose other equitable relief in addition to or instead of monetary compensation. For example, a court may order a fiduciary to disgorge any money, assets, or profits obtained through their breach of duties. Courts can also issue injunctions that require fiduciaries to take an action or refrain from an action.
How Can an Attorney Help Your Business Resolve a Breach of Fiduciary Duty Claim in Hickory, NC
Whether you’re a plaintiff or defendant in a breach of fiduciary duty claim, an experienced litigator from Patrick, Harper & Dixon, LLP, can help you pursue a favorable resolution to your legal case by:
- Investigating the claim to secure critical evidence that supports your case
- Explaining your legal rights and options to you to help you make decisions at each stage of the legal process
- Working with expert witnesses in cases involving complex financial or accounting issues
- Evaluating your options to achieve a positive outcome that achieves your goals and objectives in your case
- Aggressively seeking a fair, favorable resolution to your case, whether through a negotiated settlement or by taking the case to court and trial
Contact Us Today to Discuss Your Options
When your business faces fiduciary claims or your fiduciary breaches the duties they owe you, you need experienced legal counsel who can guide you through your options and advocate for your rights and interests. Contact Patrick, Harper & Dixon, LLP, today for a confidential consultation with a business litigation attorney in Hickory, NC, to discuss your next steps.
