Which of the following is an example of a breach of a fiduciary duty?
A)A partner in a firm learned of a business forced to sell some heavy equipment.Although the partnership could have used the equipment,he bought and sold it at a substantial profit before the partnership was given a chance to buy it.
B)A shareholder of ABC Ltd.,a trucking corporation whose shares are listed on the Vancouver Stock Exchange,is working as an employee for ABC Ltd.'s competitor,Jonstone Trucking.
C)A shareholder of a corporation voted in favour of an acquisition by the corporation at the annual general meeting because he secretly had an interest in the corporation being purchased.
D)The directors of the corporation,contrary to a request made by the shareholders,refused to declare dividends.
E)A promoter of a corporation sold property to the corporation for four times what he had paid for it after he made full disclosure of his interest to an independent board of directors,which voted for the purchase.

Question

Quizplus · Accepted Answer

The partner in the firm had a fiduciary duty to act in the best interests of the partnership, which included not taking advantage of opportunities for personal gain before offering them to the partnership.

Answer: B
 The shareholder is breaching their fiduciary duty of loyalty to the corporation by working for a competitor.

Answer: C
 The shareholder had a conflict of interest and should have disclosed it and recused themselves from voting on the acquisition.

Answer: D
 While the decision of whether or not to declare dividends is usually left to the discretion of the board of directors, the directors still have a fiduciary duty to act in the best interests of the shareholders.

Answer: None of the above
 Choice E involved full disclosure and a vote by independent directors, so it did not involve a breach of fiduciary duty.

Which of the Following Is an Example of a Breach