Self-Dealing By Officers or Directors of a Corporation

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Self-Dealing By Officers or Directors of a Corporation

by Dan Brecher on October 4, 2012

Corporations are owned by their shareholders, managed by their directors and operated by their officers. On occasion, directors or officers have used their positions of trust to take advantage of opportunities that should have gone to their corporations. Unless done with the prior knowledge and authorization of their corporation, an officer or director who seizes such an opportunity has breached fiduciary duties owed to his corporation and its shareholders. Penalties, including punitive damages, can be imposed upon those officers or directors who have not acted with proper loyalty or who acted unlawfully in the transaction.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Daniel Brecher, Scarinci Hollenbeck | Attorney Advertising

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