Breach of Fiduciary Claims

Breach of Fiduciary Duty Claims

Under Texas law, the officers and directors of a corporation owe a fiduciary duty to the company. To comply with this fiduciary duty, the officers and directors must:

  • Be diligent and prudent in managing the corporation’s affairs, while exercising unbiased and honest business judgment in the pursuit of the corporation’s best interests
  • Act with loyalty towards the corporation
  • Avoid self-dealing transactions in which corporate assets or corporate profits are used in a way that benefits the officer or director, rather than the corporation
  • Refrain from diverting new business opportunities away from the corporation into another entity that the officer or director owns or controls.

When a corporate officer or director breach their fiduciary duties, either the corporation or, in most instances, an individual shareholder can bring legal claims against the officer or director. Because a claim for breach of fiduciary duty involves the violation of the special relationship of trust that is enjoyed by the corporate officials, the legal remedies can be severe.

If you suspect that an officer or director of a corporation in which you own stock may have violated these duties of obedience, care, and loyalty, contact the attorneys at Powers Taylor. We will help you to evaluate the strength of your potential claims and to determine the best strategy for enforcing your rights as a shareholder.

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