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Voting Trusts, Corporations

A “voting trust” is an agreement where one or more shareholders appoints a trustee to vote on behalf of the shareholders at a corporate meeting. It is in effect a more nuanced proxy arrangements (a proxy is usually legally authorized to vote on another person’s behalf). The principle difference is that a voting trust document […]

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Employee Duty of Loyalty

In Missouri — even without an employment contract, non-compete agreement, non-solicitation agreement or confidentiality agreement — an employee owes his/her employer a duty of loyalty. Western Blue Print Co., LLC v. Roberts, 367 S.W.3d 7, 15 (Mo. 2012). What this generally means is that an employee cannot work directly against his/her employer’s interests. At the same […]

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Majority Shareholder Fiduciary Duties

In Missouri, a common mis-perception is that only corporate officers and directors owe a fiduciary duty to the company and the company’s shareholders. There are, though, limitations on the rights of majority or dominant shareholders to act in their own self-interest. Specifically, shareholders in control — through majority ownership or otherwise — are under a […]

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Power of Attorney Self-Dealing, Gifts

An attorney-in-fact is someone appointed by a principal under a power of attorney to make decisions on behalf of the principal. The decisions usually relate to financial or healthcare matters for the principal. An attorney-in-fact is a fiduciary of the principal and must act in the principal’s best interests. This generally includes an obligation to […]

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Trust Opportunities, Trustee Breach of Loyalty

Corporate directors/officers and trustees are similar in that they are both fiduciaries and owe others (i.e., shareholders or beneficiaries, respectively) a duty of loyalty. As part of the duty of loyalty, the “corporate opportunity doctrine” forbids a corporate director from acquiring for his or her own benefit an opportunity that would have been valuable and […]

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Employer-Employee Fiduciary Duties, Non-Compete, Non-Solicitation

A fiduciary relationship exists or is established when one reposes trust and confidence in another in the handling of certain business affairs. Every employee owes his or her employer a duty of loyalty. Nat’l Rejectors, Inc. v. Trieman, 409 S.W.2d 1, 41 (Mo. 1966). This makes sense because the employer is paying the employee to carry […]

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Trusts: Trustee Duty to Report & Inform

As part of a trustee’s general fiduciary duty, a trustee must keep qualified beneficiaries reasonably informed about the status of the trust and of facts necessary for them to protect their interests. Section 456.8-813, RSMo. Because this is a fuzzy standard and is quite fact intensive, the Missouri Trust Code states that a trustee presumptively […]

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Trustee Fiduciary Duties: Prudence, Impartiality, Loyalty

A trustee — whether appointed privately or by a court — is a fiduciary of the highest order and is required to exercise a high standard of conduct and loyalty in administration of a trust. John r. Boyce Family Trust v. Snyder, 128 S.W.3d 630, 636 (Mo. Ct. App. 2004). Although the trustee has many duties […]

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Insurance Agents, Brokers: Fiduciary Duties

With respect to fiduciary duties, the law treats insurance agents and insurance brokers differently. By insurance agent, I mean an individual who works directly for the insurance company. By insurance broker, I mean an individual who doesn’t work for the insurance company but sells, solicits, and/or negotiates insurance on behalf of the insured with an insurance company. […]

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Corporate Shareholder Derivative Claims

Management of a corporation’s operations is vested in a board of directors. The board of directors, in turn, owe the corporation’s shareholders a fiduciary duty of loyalty, due diligence, and care. What happens if the board of directors violates this fiduciary duty? Given that management of the corporation is vested in the board of directors, […]

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