Joseph L. Bierwirth Jr., chair of Hemenway & Barnes’ Litigation Group, told Massachusetts Lawyers Weekly that a recent ruling by a Superior Court judge appears to open a new avenue for direct fiduciary claims by shareholders in non-close corporations against directors or controlling shareholders.
The Massachusetts Lawyers Weekly article reports on the case of Punzak v. McIvor, et al., in which the judge ruled that a shareholder/physician who was terminated from a medical group could bring a breach of fiduciary duty claim against its president, James English. The Plaintiff, Stephen Punzak was an anesthesiologist at Anesthesia Associates of Massachusetts, PC., an 83-person professional corporation. English argued that corporate officers owe a fiduciary duty only to the corporate itself. Judge Mitchell H. Kaplan, sitting in the Business Litigation Session noted, “that while AAM was not a closely held corporation, it acted like a close corporation or a partnership, and English, while not a majority shareholder, had similar authority given his control over who sits on the board.”
Bierwirth commented, “To me, critical to the determination was that the shareholders all practiced the same profession as anesthesiologists, they relied on income from the corporation for their livelihoods and did not expect to derive any value from their ownership interests other than salary.”
To read the full article, please click here: “Co. president owes fiduciary duty to fired doctor/shareholder”