Additional Causes of Action in Oppression Litigation – Corporate Opportunity Doctrine

Often, business break-up or oppression litigation will include allegations that one side or the other breached fiduciary duties. Courts have consistently recognized shareholders who owe certain fiduciary duties to the other shareholders and corporate entity.  See, Orchard v. Covelli, 590 F.Supp. 1548, 1556 (W.D. Pa. 1984) (citing various Delaware cases).   The corporate opportunity doctrine prohibits directors, officers and employees from personally taking advantage of business opportunities that fall within the company’s business activities.  For example, if a shareholder of a law firm that handles personal injury cases is approached by  potential personal injury client, that shareholder must bring the case to her law firm. If she were to handle the case “on the side,” without the knowledge or consent of the other shareholders and corporation, she breached fiduciary duties  because officers, directors and employees are prohibited from competing with the corporation.   See, Levy  & Surrick v. Surrick, 362 Pa. Super. 510, 524 A.2d 993, 995 (1987).