e. Fiduciary Duties

Question 1

A. Standard fiduciary duties

Answer 1

1. Created be courts to protect someone in the group
2. Trusteees, partners, agents, lawyers,
   a. Standard categories
3. Confidential relationship
   a. These evolved from cases
   i. When the dealings between the parties have continued for so long that one party is justified in relying on the other to act in the formers best interest.

Question 2

f. What duty to shareholder in close corporations owe one another

Answer 2

A. Ny/tex/Delaware
1. None
B. Mass (Wilks)
1. Substantially the same fiduciary duty in the operation of the enterprise that partners owe to another
a. Punctillio, the highest standard- utmost good faith and loyalty.

Question 3

2. Wilks gives us three step Test

Answer 3

a. Is the corp a close corp?
i. If so, shareholders owe eachother fiduciary duty
b. If a minority shareholder challenges an action, the controlling group must show a leg bus objective for its action
i. If they cant minority wins
c. If they can show leg bus objective, minority can still prevail if,
i. It shows the controlling group could have accomplished its business objective in a manner that harmed his interests less.

Question 4

g. You can limit

Answer 4

but not eliminate fiduciary duties.

A. You can tailor

Question 5

h. If corps have fiduciary duties,

Answer 5

don’t have a way around them like you do in LLC’

Question 6

1. Basic rule for shareholders

Answer 6

a. Owe no duty to corp or other shareholders

Question 7

C. LLCs have

Answer 7

fiduciary duties among members
1. Default can be changed or removed, but must be done explicitly
B. You have duties, but can tailor.

Question 8

Corps:

Answer 8

tex/del/ny- no shareholder duties

ma/ak/ia- fiduciary duties in close corps

Question 9

llc default rule

Answer 9

pship fiduciary duties, can be varied, even eliminated