Legal Question in Business Law in Minnesota

Responsibilities of a shareholder and officer

The president and shareholder of a closely held corporation is asked by their top customer to come work for them full-time. They indicated that they would not use the corporation for service anymore. The president then resigned, put his wife on as president, quit and went to work for that customer. Did that shareholder violate his fiduciary duty even though that customer indicated they wanted him to come work for them and said they would no longer use the corporation�s services. There was no vote from the shareholders or the board of directors approving this shareholder going to work for the corporation�s top customer.


Asked on 2/12/09, 10:21 pm

1 Answer from Attorneys
David Anderson Anderson Business Law LLC

Re: Responsibilities of a shareholder and officer

You don't indicate if there is a non-compete, so it will be assumed that non exists. It appears from your scenario that discussions took place during the term of the President's tenure.

There may be additional facts which give rise to an actionable case for misconduct or breach of duty to the corporation.

Has a lawsuit been threatened or initiated?

Call or email for additional assistance.

This is a complex area and cases are very fact specific.

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Answered on 2/13/09, 7:27 am


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