Opinion ID: 1205899
Heading Depth: 1
Heading Rank: 3

Heading: Corporate Opportunity Doctrine

Text: It is also generally recognized that a corporate fiduciary cannot exploit an opportunity that belongs to the corporation. The difficulty arises, however, when attempting to ascertain if a particular opportunity belongs to the corporation. We first note that the usual factual situation which evokes consideration of the corporate opportunity doctrine is not present here. Typically, the fiduciary is accused of diverting a business opportunity which the corporation has an expectancy interest or property right. Scrutiny generally reveals that the opportunity, in all fairness, should belong to the corporation. E.g., Klinicki v. Lundgren, 298 Or. 662, 695 P.2d 906, 910 (1985). This is not the scenario involved here. An agreement was reached between the parties whereby LSI could cancel the Sprague sublease. The Leavitts agreed to such an arrangement and when confronted with the reality of it, they failed to pay the $300 fee in order to protect the corporate interests about which they now express such concern. We again must point out that the Leavitts were experienced in such transactions and were always represented by able counsel. In these circumstances, it is not difficult to perceive why the trial court was unpersuaded by arguments of the Leavitts. We agree with commentators who argue that stricter rules related to the corporate opportunity doctrine are necessary when dealing with a public corporation. A more flexible approach, however, is dictated when dealing with a small corporation which is generally contractual in nature. Brudney and Clark, A New Look at Corporate Opportunities, 94 Harv.L.Rev. 997 (1981). The small number of players in a private venture result in better communication between the members. Additionally, agreements are entered into which are tailored to particular situations and objectives. We cannot say that the Leavitts proved a deprivation of any corporate opportunity owing to AIC. The record supports the trial court's determination that they failed to do so.