When a person is responsible for acting in the best interests of another person but they fail to do so, this is a breach of fiduciary duty. If you are a business owner, you may not have an operation that can completely operate on it’s own. As a result, you likely rely on several different people in varying capacities. Whether it is your employees or your partners, you have to have a strong foundation with them and be able to trust them.
Business owners can suffer costly damages when a breach of fiduciary duty happens. In this situation, it can be advantageous to consult with an attorney to see if a lawsuit would make sense in recovering losses. In California, the Los Angeles business litigation attorney at Leiva Law Firm can discuss how to proceed with a potential breach of fiduciary duty lawsuit.
When Does a Breach of Fiduciary Duty Happen?
Understanding how a breach of fiduciary duty can happen is important as it can help a business owner identify if the problem exists and how it could be affecting their operations.
There are four basic elements that define a breach of fiduciary duty. These are:
- There was a failure to fulfill expected obligations and as a result, a breach of fiduciary duty by one party to another occurred.
- A fiduciary relationship existed between the parties.
- The individual who was on the receiving end of a breach of fiduciary duty suffered material damages.
- The breach of fiduciary duty is the reason that material losses were suffered.
Some examples of what a breach of fiduciary duty looks like would be any of the following scenarios:
- In an employer-employee relationship, there are certain expectations. When these are violated a breach may have occurred. An employee sharing critical trade secrets of a company or an employee profiting at the expense of their employer.
- A partner to a company mismanaging money.
- A board of directors voting for unreasonable and absurd compensation for themselves.
A breach of fiduciary duty is something that can happen within any company. And, while no business wants to be in a position where a breach of fiduciary duty happens, it still can. Meeting with an attorney who understands complex business litigation issues, like breach of fiduciary duty, can help a company recover financial compensation for losses.
If you believe that you were the victim of a breach of fiduciary duty, an attorney can review your situation and help you understand what has happened and if a lawsuit will be appropriate.
Speak to an Attorney at the Leiva Law
A breach of fiduciary duty can often come unexpectedly. And while distressing, there could be a legal path forward to regain the financial losses suffered. Even though filing a suit may not be the most desirable approach, it may be the best one.
For more information on what a breach of fiduciary duty is and how to recoup compensation, you are welcome to call an attorney at Leiva Law at (818) 519-4465. Initial consultations are complimentary.