federal courts. His practice focuses primarily on personal injury cases
and business litigation. He is admitted to practice in the South Carolina
Courts, in the Fourth Circuit Court of Appeals and the United States
Supreme Court.
federal courts. His practice focuses primarily on business litigation,
construction litigation and local government law. He is admitted to
practice in the State of South Carolina.
151 Meeting Street
Suite 400
Charleston South Carolina 29401
843.577.6726 Phone
843.724.8036 Fax
rsrosen@rrhlawfirm.com
tmuller@rrhlawfirm.com
www.rrhlawfirm.com
including those for corporations, limited
liability companies and limited partner-
ships provide remedies for oppressed
shareholders or partners.
Statutes generally are phrased in
terms of the power of the courts to dis-
solve a corporation or limited liability
company when the Court finds that those
in control of the corporation have acted
illegally, fraudulently or in a manner
which is oppressive to some share-
holder, or members or have engaged
in conduct which is "unfairly prejudi-
cial" either to the corporation or to any
shareholder or member. These statutes
generally provide for some remedy short
of dissolution, normally a buyout of the
minority interests. Some cases indicate
that in certain circumstances the minor-
ity can be required to buy the interest of
the majority.
The conduct of officers, managing
members and directors will frequently
objective standard. These individuals
are often said to have fiduciary duties to
the corporation and the shareholders or
members of the company.
The most frequently cited description
of the fiduciary duty of a partner is the
famous enunciation by Justice Cardozo
while he was on the New York Supreme
Court.
while the enterprise continues, the
duty of the finest loyalty. Many forms
of conduct permissible in a worka-
day world for those acting at arm's
length, are forbidden to those bound
by fiduciary ties. A trustee is held to
something stricter than the morals of
the market place. Not honesty alone,
but the punctilio of an honor the most
sensitive, is then the standard of be-
havior. As to this there has developed
a tradition that is unbending and
inveterate. Uncompromising rigid-
equity when petitioned to undermine
the rule of undivided loyalty by the
`disintegrating erosion' of particular
exceptions. Only thus has the level of
conduct for fiduciaries been kept at a
level higher than that trodden by the
crowd. It will not consciously be low-
ered by any judgment of this court.
including the Limited Liability Company
Act did not go as far as Justice Cardozo
did in 1928. The members of limited
liability companies are by statute bound
to duties of loyalty and care. There is
also a requirement of good faith and fair
dealing.
Shareholders generally owe no duty
to the corporations or to other sharehold-
ers. They are passive investors. Rather,
directors and officers stand in a fiduciary
relationship to the corporation and its
shareholders. The standard they must
follow is "utmost good faith," a strict rule
of honesty and fair dealing.
In Delaware, corporate officers owe fi-
duciary duties that are identical to those
owed by corporate directors. Fiduciary
duties run to shareholders and corpora-
tions not to fellow officers or directors.
What is a fiduciary duty? It means
that directors and officers of corporations
owe the corporation complete loyalty,
honesty and good faith. A director or of-