What Does it Mean to have a Fiduciary Duty?
An Orange County fiduciary duty attorney can provide help to individuals who are accused of breaching their fiduciary duty and can provide assistance to shareholders who believe that a fiduciary duty has been breached. Legal action can be taken for a violation of a fiduciary duty, so it is important to understand what it means to have this duty and when a breach occurs.
Brown & Charbonneau, LLP can provide comprehensive assistance in all circumstances where a dispute arises in regards to whether a fiduciary duty is breached. We can defend those accused of a breach or bring a claim forward on behalf of a plaintiff who believes that a breach of fiduciary duty has caused him harm. To find out more about how our firm can help you, give us a call today.
What Does it Mean to Have a Fiduciary Duty?
A fiduciary duty is the highest duty under the law that a person can owe. In California, corporate officers and executives are typically considered to have a fiduciary duty both to the company itself as well as to shareholders of the company. Those who have a fiduciary duty are expected to act in the best interests of the company and its shareholders.
There are specific obligations that a fiduciary has to the company and shareholders including:
- A duty of loyalty: The director or executive must be loyal to the company and focused on putting the interests of the company first. He cannot act to enrich himself at the expense of the company. If an executive diverted opportunities from the business to himself, for example, this would be considered a breach of the duty of loyalty.
- A duty of care: Directors and executives must act with due care when making decisions on behalf of the company. They should not be negligent in performing their job duties. For certain executives and directors, there is also a duty to make sure that financial information being provided by the company is accurate and true to the best of the executive’s knowledge.
- A duty of good faith and fair dealing: Directors and executives are expected to carry out their role to the best of their abilities and to make a good faith effort to do their jobs properly so as to advance the interests of the company.
If a corporate officer or executive has been accused of breaching his or her fiduciary duty, there are possible defenses that the officer could raise. For example, the business judgement rule is a common defense to breach of fiduciary duty.
When a corporate executive or director made a decision in his official capacity and the decision turns out to have been a poor choice that has adverse consequences, this is not necessarily a breach of fiduciary duty and the fiduciary can’t always be held accountable for it.
Under the business judgement rule, the fiduciary is protected from facing liability for decisions made in the course of business as long as those decisions were made in good faith and as long as the director or executive had a reasonable belief that he or she was doing what was right for the organization.
It can be complicated to determine whether the business judgement rule applies and whether a breach of fiduciary duty occurred, so it is important to have experienced legal representation in cases where questions arise regarding a breach of fiduciary duty.
Getting Help from an Orange County Fiduciary Duty Attorney
An Orange County fiduciary duty attorney at Brown & Charbonneau, LLP can provide assistance in determining if a fiduciary duty was breached and what the appropriate course of action is. We can help those accused of a breach to defend themselves or to settle the allegations and we can also provide assistance to individuals who are seeking a remedy for breach of fiduciary duty. To find out more about how our firm can help you, give us a call at 866-237-8129 or contact us online today.