Opinion ID: 10313
Heading Depth: 3
Heading Rank: 3

Heading: Theft of Corporate Opportunity

Text: 36 The district court found that McDonald's deceit excluded C & B from certain transactions in which it might have chosen to participate had it been given the opportunity. Although C & B's financial ability to buy used equipment was limited, according to the court the evidence indicated that McDonald unilaterally decided--without C & B's knowledge and without consulting Cason--whether a given deal was a risk C & B wished to or could afford to take. 37 McDonald seeks protection behind La.Rev.Stat. § 12:91 by claiming that the transactions involving himself, COI, and CCC with third parties were arm's length and fair; and, therefore, the standard under § 12:91 was met. Section 12:91 states: 38 Officers and directors shall be deemed to stand in a fiduciary relation to the corporation and its shareholders, and shall discharge the duties of their respective positions in good faith, and with that diligence, care, judgment and skill which ordinarily prudent men would exercise under similar circumstances in like positions.... 39 The district court was right not to speculate as to whether C & B, had it known of the opportunities, would have accepted them or chosen to let McDonald make those decisions for it. The court allowed for the fact that C & B was operating under constraints imposed by its loan obligations and the charge of its chief shareholder. But even these allowances do not surmount the district court's finding on good faith. McDonald's active concealment for years of his interests in relation to C & B transactions or potential transactions undermines any argument on his part that he acted fairly and to the benefit of both C & B and himself. C & B was never allowed to make those decisions for itself. We do not dispute the district court's good faith finding, and we affirm its judgment that McDonald breached his fiduciary duty to C & B.