Why Shareholders File Suit

• Misusing corporate assets or opportunities.
• Committing fraud or intentional misconduct.
• Violating the duty of loyalty to the organization.
• Engaging in self-dealing for personal profit.
• Failing to oversee major regulatory compliance.

Taking Action in Texas

Seeking an Advocate 

Denied Access to Records 

Squeeze-Out Tactics 

Exclusion from Management 

Breach of Fiduciary Duty 

Guarding Your Financial Future 

Steps to take to prove breach of the fiduciary duty in Texas

• Gather documentation: To prove that a duty existed and that it was breached, you’ll likely need to rely on documentary evidence to a certain extent. Employment contracts, partnership agreements, emails and financial statements can all be crucial here. Be as diligent as possible. Communications that may seem innocuous at first glance can wind up proving a key element in your case.
• Obtain witness statements: Breach of the fiduciary involves some sort of wrongdoing. It’s rare that those who breach their fiduciary duty are able to do so in a vacuum. There are probably multiple witnesses, some of whom may be within your business, who observed the wrongdoing in question. Be thorough, then, in speaking to those who worked and interacted with the fiduciary so that you can determine if their accounts can help you show that the fiduciary duty has in fact been breached.
• Consider utilizing a forensic accountant: Fiduciaries who cheat the businesses they work for can be savvy in covering their tracks. This can make it hard to spot mismanaged or missing funds. A forensic accountant can analyze your business’s financial records to determine where money has gone, giving you a better idea if wrongdoing is afoot.
• Develop a timeline: If you suspect that your partner or other individual acting in a fiduciary capacity has engaged in self-dealing, financial misappropriation or carelessness, then it may help to put together a timeline to help pinpoint when the breach occurred. A strong timeline can also give you guidance in your investigation, as it can narrow down when things started to change or go wrong, thus driving you toward the actions that may have constituted a breach of the fiduciary duty.

Act now to protect your business after a breach of the fiduciary duty

Steps to address a breach of contract

Legal remedies for breach of contract

• Damages: This can include monetary compensation for losses incurred due to the breach. The amount varies on the case, potentially in the billions as showcased when Elon Musk threatened to walk away from a multi-billion dollar deal when he believed Twitter was committing a material breach.
• Specific performance: This remedy involves a court order that would require the breaching party to fulfill their contractual obligations.
• Rescission: Also known as the cancellation of the contract, this option releases all parties from their obligations.

• Mediation: A neutral third party facilitates discussions between disputing parties to reach a mutually agreeable solution. Mediation encourages open communication and often preserves business relationships.
• Arbitration: A neutral arbitrator hears both sides and makes a binding decision. Arbitration is less formal than court proceedings and can be quicker and more private.

When is litigation necessary?

• Patents. This tool can grant inventors exclusive rights to their inventions, preventing others from making, using, or selling the patented technology without permission.
• Trademarks. Trademarks safeguard brand identity by protecting symbols, names, and slogans that distinguish goods or services.
• Copyrights. This tool offers protection for original works of authorship, such as software, literature, and art, ensuring creators maintain control over their use and distribution.
• Trade secrets. It is also important to protect the information that gives your business a competitive edge, such as formulas or processes, as long as the information remains undisclosed.

How do I defend my innovations?

• Pete T. Patterson - Litigation - Banking and Finance

Key points to address in employment litigation

• Your employee or former employee will misconstrue the facts: You can count on this happening in most cases. A performance appraisal aimed at addressing performance deficiencies might be construed as discriminatory in nature, and discipline could be viewed as retaliatory in nature even though it’s based on an employee’s behavioral issues. Regardless of the issue you’re facing, it’s crucial that you that you document as much as you can and have witnesses to any actions you take against your employees. These justifications, such as the bona fide occupational qualification, and interactions can be key to your defense in an employment law case.
• What you say matters: During your employment relationship and throughout litigation, your words can have severe implications for any potential lawsuits. So, make sure you’re aware of how your words can be interpreted, and when making statements do so in a way that always relates back to the employment issue in hand. Always avoid personal attacks and critiques.
• There are tight deadlines: There are strict deadlines in place when it comes to filing employment-related lawsuits. So, make sure you’re aware of these filing deadlines so that you can move to dismiss a lawsuit that’s filed against you in violation of the statute of limitations.
• You will most likely be deposed: The plaintiff’s attorney will probably subpoena you to be deposed. You can’t walk into your deposition unprepared. If you do, then the plaintiff’s attorney will probably get you to say something you wish you could take back and that’ll put you in a bad position at trial. So, make sure you ready yourself for your deposition by anticipating the plaintiff’s questions, reviewing relevant information and being aware of the legal defenses that are available to you under the circumstances.
• Resolution is a possibility: While some employment-based lawsuits are meritless, some are supported by compelling evidence. In these instances, it might be worth considering the best way to resolve the case, which could include settlement. While not ideal, settling an employment law case might save you money and protect your company’s image in the marketplace and the broader public.