Originally from:
Advising Minnesota Corporations and Other Business Organizations - 2nd Edition - Hardcover
Advising Minnesota Corporations and Other Business Organizations - 2nd Edition - Electronic
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CHAPTER 44
CORPORATE OPPORTUNITY DOCTRINE
IN THE STATE OF MINNESOTA,
OTHER JURISDICTIONS AND
FOREIGN COUNTRIES
Section
§ 44.01 Introduction
§ 44.02 Tests for Recovery
§ 44.03 Rights of Fiduciaries
§ 44.04 Safe Harbor
§ 44.05 Consequence of Breach
§ 44.06 Minnesota Law
§ 44.07 Delaware Law
§ 44.08 Corporate Opportunity Doctrine outside of the United States
§ 44.09 --United Kingdom
§ 44.10 --Canada
§ 44.11 --Australia
§ 44.12 --China and Japan
§ 44.01 Introduction
Within the more generalized duty of loyalty exists the corporate
opportunity doctrine, prohibiting fiduciaries from usurping corporate
opportunities.1 The standard is the same as the more generalized duty of
loyalty requiring fiduciaries to act in the best interest of the corporation
and its shareholders.2 The corporate opportunity doctrine is breached if a
fiduciary has a conflict of interest and acts in a self-dealing manner.3
A corporate opportunity is any opportunity to engage in a business
activity which a fiduciary becomes aware of through their performance
as a fiduciary or the use of corporate information or property, and the
corporation has an expectancy right or property interest in, or that in
fairness should otherwise belong to the corporation.4
§ 44.02 Tests for Recovery
If a claim is made against a fiduciary under the corporate opportunity
doctrine the claimant must prove that the opportunity was in fact a
corporate opportunity.5 Courts have developed four tests to determine
whether an opportunity rightly belongs to the corporation.
The interest or expectancy test focuses on whether the opportunity is
one which the corporation has a beachhead in the sense of a legal or
equitable interest or expectancy growing out of a preexisting right or
relationship, such as a contractual right.6 The degree to which this test is
enforced generally depends on courts’ interpretations of the interest or
expectancy that is required.7 Typically courts, in addition to considering
whether the corporation had an interest, actual or expectancy in the
opportunity, examine whether the acquisition by the officer would hinder
or defeat plans of the corporation in continuing or developing business
for which it was created.
Roger J. Magnuson is a Partner at Dorsey and Whitney, LLP, where he serves as Head of the National Strategic Litigation Group and has practiced since 1973. He has been recognized as one of the top trial lawyers in the United States by major national and international publications, including Chambers International Guide to American Lawyers, which profiles the top 500 trial lawyers in the United States, Best Lawyers in America, Who's Who in American Law, and Who's Who in America. Mr. Magnuson was also recognized by a Journal of Law and Politics' survey for Judge's Choice "Wins Most Cases."
Some high profile cases that he has litigated include representation of the Florida Senate in the Bush v. Gore election controversy in 2000; and representation of the Plaintiffs in the widely publicized and studied Mall of America case. For several years he has represented, among other persons and entities, the Minnesota Twins and Major League Baseball principals and players in litigation; and has litigated national and local cases in federal and state court venues. He has appealed before the Supreme Court in a number of cases; as well as the Minnesota Supreme Court. He has authored several articles and 7 books.
Richard A. Saliterman is a Principal in Saliternan & Siefferman P.C., a full-service firm in Minneapolis established in 1976. Mr. Saliterman is a leading expert on corporate business matters, and is the author of several publications on business start-ups, franchises, and trademarks. Mr. Saliterman is the former National Judge Advocate for the U.S. Navy League, based in Washington D.C.
Contributing Editor:
Amanda Chang
Contributing Authors:
Alecia Anderson
Seth Back
John Baker
Shannon Berg
Constatin Burachek
Benjamin Carpenter
Ryan Check
Carl Christensen
Peter Fear
Michael Frasier
Aaron Hall
Catherine Hanson
Paul Harman
Amy Ithlan
Michael Kern
Chris Kuhlman
