Opinion ID: 200293
Heading Depth: 3
Heading Rank: 2

Heading: dlj

Text: 17 Assuming, arguendo, that a fiduciary relationship was established between Hershey as an individual and DLJ, Hershey has shown insufficient causation to support his claim for breach of that fiduciary duty. To recover for such a claim, one must show the existence of a duty and a breach of that duty causing injury. Strock v. Pressnell, 38 Ohio St.3d 207, 527 N.E.2d 1235, 1243 (Ohio 1988); 382 Capital v. Corso, 1999 WL 1262054, 1999 Ohio App. LEXIS 6488, at  (Ohio Ct.App.1999) (requiring plaintiffs to prove proximate causation for breach of fiduciary duty claim). Here, Hershey claims that DLJ (1) failed to disclose its true interests and role in the transaction, (2) failed to disclose the interrelation of the acquisitions of ATC and CAF by Conseco, and (3) failed to timely distribute material information to Hershey prior to Hershey's decision to vote for the merger. However, Hershey was aware (1) that DLJ was representing CAF as well as ATC, and that DLJ would profit from both representations, and (2) of the financial interrelationship of the acquisitions of ATC and CAF by Conseco. At the August 11 board meeting, Gormley announced that Conseco was also considering acquiring another company DLJ represented. The impact of this multiple acquisition was analyzed in the due diligence material Hershey received before the merger vote. And two days before the vote, Gormley revealed the identity of ATC. 18 Hershey cannot identify any material information that was withheld from him by DLJ; his claim for breach is therefore a question of whether DLJ provided the information with sufficient time for Hershey to make an informed decision. Hershey has not shown how more time would have altered the outcome and, in light of the fact that he was aware of all the material information, has not identified any way in which his vote was influenced improperly. When asked what he would have done differently had he known of Conseco's acquisition plans, Hershey only stated, this is somewhat speculative, but in the context, I might have requested a higher price, requested a collar on the stock, but that's a little bit speculative.... Such speculation is insufficient to support a claim for breach of fiduciary duty. See Shults v. Henderson, 625 F.Supp. 1419, 1426 (W.D.N.Y.1986) (if the plaintiff is not materially harmed by the defendant's conduct... there may be no recovery.). A claim of breach of fiduciary duty by an individual shareholder will not lie if the shareholder's objection is essentially a complaint regarding the price which he received for his shares. Stepak v. Schey, 51 Ohio St.3d 8, 553 N.E.2d 1072, 1075 (Ohio 1990). When asked how he was monetarily damaged by the merger, Hershey stated I don't feel that it represented the full value of CAF; and that the merger was not in the best interests of the shareholders. The only damages identified are damages to the shareholders as a whole, not to Hershey specifically. 19 Hershey is unable to show any material damage caused by DLJ's late disclosure of information; instead, he seeks to disgorge DLJ of all money earned in its representation of CAF. Hershey claims that this case is analogous to fraud cases, where courts sitting in equity have ordered such rescissionary damages to an innocent seller when a fraudulent buyer has profited. We find that analogy misplaced. In the fraud context, a court may award profits realized by the fraudulent buyer after the sale if it is shown that the seller would have held the property, and thus realized the profits himself, but for the fraud. Ohio Drill & Tool Co. v. Johnson, 498 F.2d 186, 190-91, 193 (6th Cir. 1974) (holding that defendant officers must disgorge to the corporation all profits made by them on a fraudulent sale but not allowing plaintiff to seek disgorgement of profits resulting from material misrepresentations in proxy statements); accord Capital Invest., Inc. v. Bank of Sturgeon Bay, 430 F.Supp. 534, 537 (E.D.Wis.1977). Hershey's claim is inapposite: he personally seeks disgorgement of the fees related to the sale, not to any profits gained by DLJ after the sale. Because Hershey has not demonstrated any personal injury suffered, we reject his claim of breach of fiduciary duty by DLJ.