If you are a business owner, or currently serve on the board of a public or private corporation, you are likely aware of the concept of fiduciary duty. This legal phrase, generally speaking, refers to each board member’s duty to act with loyalty and good faith toward the company – and prohibits nonconsensual self-dealing or self-interested transactions. In the event a board member steps outside the bounds of proper fiduciary duty, it may be necessary to engage in legal action to correct or undo the transaction – or oust the member all together.
How a Fairfax Business Lawyer Can Help
The proper course of action following breach of fiduciary duty will depend very heavily on the specific facts at hand. If the breach occurred in conjunction with a transaction between the corporation and another company, it may be possible to initiate a legal intervention to stop the transaction (e.g., merger or acquisition) from continuing or settling. If the breach involves the dissemination of trade secrets or other proprietary information, your attorney may be able to initiate similar injunctive proceedings to preclude the rogue board member from further damaging the company – as well as commence a civil lawsuit to recover damages incurred as a result of the breach.
Oftentimes, a breach of fiduciary duty signifies the need to remove the particular member from the board of directors all together – which can be tricky, particularly for closely-held businesses or if the member is a founder. For these reasons, we suggest working with a Fairfax business lawyer to help ensure the board member is removed according to the terms of the bylaws and articles of incorporation. Failure to properly abide by the termination or removal procedures could result in counter-litigation by the ousted member, which is a result no one wants to see take place.
Contact an Experienced Fairfax Business Law Firm Today
If you are in the midst of a breach of fiduciary duty within your business and believe you may have suffered financial harm as a result, there are legal options for you to consider. For more information, please call Schleifman Law, PLC at 703-528-1021.