For businesses in Texas, the ultimate goal is pretty much universal: profitability. Anything that impacts a company’s ability to earn and continue earning profits could be viewed as a threat to the long-term sustainability of the company. So, when the issue is significant enough, legal action may be necessary.
Perhaps nothing is as much of a threat to a company as the breach of fiduciary duty. When directors and officers are entrusted with the financial welfare of some or all of the company’s assets, those individuals must be held accountable if wrongful conduct occurs or even if blatant mistakes are made. The fiduciary owes a duty to the beneficiary (sometimes known as the “principal”) to work for financial benefit. Anything other than that could lead to litigation.
Simply put, the heart of the accusation in these cases involves the breach of loyalty and trust. Before a person can be entrusted with a company’s assets and financial welfare, that person must be trusted and be counted on to be loyal to the company’s needs, first and foremost. As our readers can probably imagine, oftentimes breach of fiduciary duty claims can be very personal.
Evaluating options
However, sometimes just jumping straight to litigation isn’t the best “business decision.” There may be other options to evaluate when it comes to allegations of a breach of fiduciary duty. Business leaders in Texas need to be sure that they are reviewing all available options in their own unique situations. The decisions they make are likely to have a significant impact on the company’s immediate and long-term future.