This week’s post is by Matthew D. Donovan, a commercial litigation partner and member of Farrell Fritz’s business divorce practice group.
There is a bit of folk wisdom that’s been passed down through my family over the generations that speaks to the rite of passage when one is confronted with the reality that there is more to life than oneself. The familial adage, as usually (and colorfully) pronounced by a superior elder, went something like: “The sun doesn’t rise and set over your own Irish arse!”
I must confess that I’ve often considered this as a kind of vernacular anchor to understanding the concept of fiduciary responsibility in the closely-held business context where officers, directors, and controlling shareholders are obligated under the law to put the interests of their company and business partners before their own. A recent post-trial decision out of Delaware’s Court of Chancery, Personal Touch Holding Corp. v Glaubach, brings home this lesson with similar colloquial color.
Not infrequent is the occasion on which we here at New York Business Divorce report on developments in Delaware law. As we have noted, Delaware has long been the preferred state of incorporation for both public and private companies, and its Court of Chancery is considered by many to be the preeminent business court in the land. Small wonder, then, that the Personal Touch decision serves as a kind of archetypal example of how not to behave in the corporate fiduciary context. Continue Reading Throwing Grenades and Casting Plagues Upon Your Fellow Directors: A Lesson in Fiduciary (Ir)responsibility