Officer and Director Liability
The Houston Texas officer and director liability lawyers at Burdine Wynne have successfully filed claims against corporate officers and defended corporate directors for personal liability regarding various business decisions. The firm regularly represents shareholders, including minority shareholders of both public and closely held corporations, who are concerned about the wrongful behavior of corporate officers. We have extensive experience defending against such claims as well.
In C.A. No. 4:95-CV-48; Aerovias de Mexico, S.A., de C.V. d/b/a Aeromexico vs. Gerardo de Prevoisin and GP Investment, Inc., In the United States District Court for the Eastern District of Texas, Sherman Division; the firm represented the organizer and leader of Aeromexico’s privatization under the Salinas administration, who also served as its chairman and chief executive officer, against RICO and other claims brought against him seeking recovery of over $75 million. Following cross-border discovery, the action was dismissed on jurisdictional grounds. The dismissal was affirmed by the Fifth Circuit Court of Appeals, and certiorari was denied by the United States Supreme Court.
In Civil Action No. H-01-266, Texas First National Bank v. Kenneth Wu, et al, in the United States District Court for the Southern District of Texas. Defended several directors and minority shareholders against a claim for $30 million in damages and recission based on allegations of federal securities fraud, breach of fiduciary duty and conspiracy related to a rights offering of securities by a Taiwanese-oriented bank. Tried to a jury for six days. Resulted in totally exonerating verdict and judgment for the defendants.
In C.A. No. H-97-3842; Eric Baron and Edward C. Allen, On Behalf of Themselves and Al Others Similarly Situated vs. David B. Strassner, Douglas H. Kiesewetter, David R. Albin, Natural Gas Partners, L.P., David Garcia, John J. Myers, Offshore Energy Development Corporation, Morgan Keegan & Company, Inc. and Principal Financial Securities, Inc.; In the United States District Court for the Southern District of Texas, Houston Division and C.A. No. H-98-0364; John W. Robertson, Joyce Berk, Kregg Berk and Rodney Bernat, On Behalf of Themselves and All Others Similarly Situated vs. David B. Strassner, Douglas H. Kiesewetter, David R. Albin, Natural Gas Partners, L.P., and Offshore Energy Development Corporation; In the United States District Court for the Southern District of Texas, Houston Division – Defended the issuing corporation and its founding management in claims of securities fraud arising out of initial public offering. Resulted in a confidential settlement, at no direct cost to the company or its management
The firm has also represented shareholders in claims against individual directors. For example, Burdine Wynne’s shareholder lawyers represented a class of minority shareholders in a medical waste management company against the majority parent alleging several theories of action that primarily included minority shareholder oppression and breach of fiduciary duty. The case settled for $32,500,000 in cash and the firm was awarded a fee of $10,833,333.00 and reimbursement of its several hundred thousand dollars in expenses. The defendants were represented by Kirkland & Ellis from Chicago and by a local firm in Shreveport. The suit was filed in Louisiana, and the firm’s lawyers are familiar with Louisiana securities laws.
Corporate officers owe a fiduciary duty to the corporations they serve. They must, therefore, act in good faith for the benefit of the business above themselves, including abiding by the duties of loyalty, utmost good faith, candor, fair dealing, integrity of the strictest kind, full disclosure, and refraining from self-dealing.
The following are examples of breaches of fiduciary duty:
- Using business assets for personal benefits or to usurp corporate opportunities for personal gain
- Steering business opportunities toward another business with which the officer or director is associated
- Standing on both sides of a transaction such as having a financial interest in a company doing business with the business the fiduciary serves
- Leaving the business without providing appropriate notice
In the event of a transaction between a fiduciary and his or her beneficiary, a presumption of unfairness may place the burden on the fiduciary to prove the transaction’s fairness. In other words, the unfairness presumption would shift the evidentiary and persuasion burden to the defendant.
If your business has suffered losses due to the unlawful actions of officers, directors, or majority shareholders, we offer a free consultation to discuss your claims. We also represent officers and directors who have been sued by the companies they serve.