1. Florida courts recognize a tort cause of action for breach of fiduciary duty.
2. The elements of a claim for breach of fiduciary duty are: (1) the existence of a fiduciary duty; (2) breach of that duty; and (3) damage proximately caused by that breach.
3. Breach of a fiduciary duty is an intentional tort. – A fiduciary relationship exists between corporate officers and minority stockholders in Florida LLC.
– Breach of fiduciary duty occurs when majority shareholders take personal benefits not enjoyed by minority shareholders.
– LLC managers can breach fiduciary duty by knowingly permitting the LLC to violate a contractual duty owed to a member. – Allowing distributions that render the company insolvent is a breach of fiduciary duty.
– Employment of “squeeze-out techniques” by majority shareholders may give rise to claims of oppression and breach of fiduciary duties.
– Wrongfully retaining revenues and profits of the LLC also constitutes a breach of fiduciary duty.
– In a breach of the duty of loyalty case, if one member misappropriates LLC funds, others have a right to bring a direct claim.
– Courts have recognized that members of an LLC are directly injured by the misappropriation of funds, usurpation of business opportunities, or other willful misconduct by another member of the LLC. 1. A manager cannot argue ignorance of the fact that distributions would render the LLC insolvent, violating Florida law.
2. Directors of a company have a duty to act on an informed basis and must inform themselves of all material information before making a business decision.
3. A member of an LLC can bring a breach of fiduciary duty claim for money damages against another member or managing member for wrongfully retaining revenues and profits of the LLC.
4. Agreements and common law precedent may alter the damages available for breach of fiduciary duty.
5. For oppressed minority members, the proper measure of damages is the difference between the fair value of their shares and the value stipulated in the buyout agreement.
6. The fiduciary relationship within an LLC is likely created when a majority member or manager exerts discretionary power over the interests of minority members.
7. The relationship may arise through contracts, statutes, or may be implied under the specific circumstances of the parties’ relationship.
8. Once a member is determined to be a fiduciary, the challenge is to discern the obligations they owe and the consequences of their deviation from that duty.
https://www.jimersonfirm.com/blog/2014/04/determine-whether-florida-llc-member-breached-hisher-fiduciary-duty-making-distributions/
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