News & Analysis as of

Fiduciary Duty Liability

Proskauer - The Capital Commitment

Protecting Sponsors from Emerging Portfolio Company Risks through Insurance

In addition to the normal operational and legal risks associated with owning and managing portfolio companies, 2025 has introduced or exacerbated a wave of geopolitical and macroeconomic risks such as inflation, tariffs,...more

Charles E. Rounds, Jr. - Suffolk University...

Liability of Trust Beneficiary Who Litigates Vexatiously or Participates in a Breach of Trust

The Restatement (Third) of Trusts, specifically §104, lists four general areas in which the beneficiary’s actions may lead to an assumption of internal liability to the trust estate: (1) A loan or advance to the beneficiary...more

Ropes & Gray LLP

SEC Speaks 2025: Key Takeaways from Division of Enforcement Panels

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The SEC’s Division of Enforcement intends to remain a “cop on the beat,” and will refocus on traditional core enforcement areas, such as insider trading, accounting and disclosure fraud, market manipulation, and breaches of...more

Allen Barron, Inc.

A Trustee or Executor has Substantial Financial and Legal Liability

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Have you been asked to be a trustee or executor? A trustee or executor has substantial financial and legal liability, and the trust or estate will pay an attorney to guide them through the process....more

Integreon

Cybersecurity, Wire Fraud, and Attorney Liability: The Growing Risk Landscape

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Wire transfer fraud is on the rise, and attorneys are increasingly becoming prime targets for cybercriminals. With billions lost annually to fraudulent transactions, legal professionals who fail to implement robust...more

DarrowEverett LLP

Fiduciary Duties and Remedies in Florida LLCs: What Members Need to Know

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Disputes among members of a limited liability company (LLC) are inevitable. Unlike casual disagreements with friends or roommates, conflicts within an LLC can have legal and financial consequences. Recognizing this reality,...more

Charles E. Rounds, Jr. - Suffolk University...

To Lawyers Who Refer Clients to Estate-Planning Attorneys Who Act as Professional Trustees: Beware the Uniform Trust Code’s...

Consider the lawyer who lacks a working familiarity with trusts, and with estate planning generally. He prudently and ethically refers a client in need of an estate plan to a well-respected lawyer who also happens also to be...more

Fox Rothschild LLP

How Pennsylvania's New Directed Trust Act Will Affect Corporate Trustees

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Now that Pennsylvania recognizes directed trusts, corporate fiduciaries should be aware that sharing trust responsibilities could create both legal liability and administrative burdens. The law, which went into effect late...more

Charles E. Rounds, Jr. - Suffolk University...

May a Mentally Incapacitated Trustee Be Held Personally Liable for His Breaches of Trust?

Assume sole trustee of an irrevocable discretionary trust for benefit of deceased settlor’s descendants living from time to time suffers a sudden unforeseen mental disability that causes trustee to imprudently administer the...more

Fishman Haygood LLP

ABA Issues Formal Opinion for Lawyers Advising Organizational Clients Where Constituents Might Have Conflicts of Interests or Be...

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The American Bar Association (ABA) Standing Committee on Ethics and Professional Responsibility recently issued Formal Opinion 514 regarding a lawyer’s obligations when advising organizational clients. Under such...more

Robins Kaplan LLP

A New York Partnership?

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In determining whether parties are, in fact, in a partnership depends on the conduct of the parties. Titles, labels, and disclaimers are often meaningless. Consider this scenario: In a New York City bar, two successful...more

Allen Matkins

Court Applies Internal Affairs Doctrine Even Though Statute Refers Only To Directors

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Courts are wont to say that Section 2116 of the California Corporations Code codifies the internal affairs doctrine.  See Villari v. Mozilo, 208 Cal. App. 4th 1470, 1478 n.8 (Cal. Ct. App. 2012) (“Corporations Code section...more

Lathrop GPM

Significant Amendments Proposed to the DGCL to Stem Business Defections to Other States

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Proposed amendments to the Delaware General Corporation Law (DGCL) introduce safe harbors for liability from transactions involving directors, officers and controlling stockholders and define and limit a stockholder’s right...more

Charles E. Rounds, Jr. - Suffolk University...

Individual Trustee Delegates to Financial Institution the Job of Taking Custody and Keeping Track of Income and Principal: The...

While PC software programs are a practical improvement over the trustee’s hard-copy ledger book, when it comes to keeping track of trust income and principal these programs still require serious clerical monitoring on the...more

Winstead PC

SEC Renewed Action on Hedge Clauses

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Hedge clauses are provisions in investment advisory agreements that aim to limit an adviser’s liability for certain actions or outcomes. The U.S. Securities and Exchange Commission (the “SEC”) has expressed the position that...more

Charles E. Rounds, Jr. - Suffolk University...

Due to scrivener negligence, the dispositive provisions of a trust fail to reflect the deceased settlor’s wishes: Can it be that...

Assume the deceased settlor of a trust had intended that his niece be included in the beneficiary class, but his estate-planning attorney had negligently made no provision for her in the governing instrument. After settlor’s...more

Allen Matkins

Questioning Delaware's Control Over Controlling Stockholders

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Delaware cases dealing with transactions involving controlling stockholders are often concerned with the standard of review to be applied.  See, e.g., Tornetta v. Musk, 250 A.3d 793 (2019).  Some cases engender a different...more

Farrell Fritz, P.C.

Diving Into the Shallow Waters of New York Law Permitting Elimination of LLC Managers' Liability for Breach of Fiduciary Duty

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There’s a ton of Delaware caselaw enforcing Section 18-1101 (c) of that state’s LLC Act as amended in 2004, authorizing LLC agreements to eliminate the members’ and managers’ liability for breach of fiduciary duty, the only...more

Freiberger Haber LLP

Thorny Issues Concerning the Statute of Limitations for Declaratory Relief and Breach of Fiduciary Duty

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Statutes of limitations limit the time within which a defendant can be held liable for any type of alleged wrongdoing. Plaintiffs who do not pursue their rights within the limitations period will find the courthouse doors...more

K&L Gates LLP

The Continued Evolution of Caremark Oversight Liability

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In the last year, Delaware courts have issued several notable opinions that further define—and in some cases expand—the scope of liability for failures of oversight at a corporation. Claims by shareholders that one or more...more

Pillsbury Winthrop Shaw Pittman LLP

Developments in Association Law 2022 – 2024

The following is a review of notable cases and regulatory developments for nonprofit organizations at the federal and state levels during the last two years....more

Rumberger | Kirk

Viewpoint: Early Action Key to Mitigating Risk in Professional Liability Claims

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Professional liability claims impact a multitude of professions, including those in the legal, medical, financial and insurance industries. Claims for malpractice, breach of contract, breach of fiduciary duty and related...more

Foley & Lardner LLP

Palkon v. Maffei: Delaware’s Warning Shot to Controlling Stockholders Seeking to Evade Fiduciary Duties by Reincorporating

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In late February, the Chancery Court denied a motion to dismiss a stockholder lawsuit against the controlling stockholder and board of directors of TripAdvisor, Inc., seeking to enjoin a reincorporation of TripAdvisor into...more

The Wagner Law Group

Merger and Acquisition Considerations for Employee Benefit Plans

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In the context of mergers and acquisitions, an acquisition target’s qualified retirement plans, health plans, executive compensation arrangements, and benefit programs (referred to collectively as “benefit programs”) can all...more

Venable LLP

Fiduciary Liability Limitations Under Nevada Law Trigger Entire Fairness Review of Conversion from Delaware Due to Controlling...

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The Delaware Court of Chancery, in Palkon v. Maffei, et al., C.A. No. 2023-0449-JTL (Del. Ch. Feb. 20, 2024), determined that a reduction in the liability exposure of a fiduciary due to the conversion of a Delaware...more

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