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Breach of Fiduciary Duty



At Dilendorf Law Firm, we simplify complex legal issues related to fiduciary duties. If you’re unsure about what these duties mean or if they’ve been breached, our team is here to help.

We’ll explain everything in clear terms, investigate any potential issues, and work to resolve disputes quickly and fairly.

Our goal is to protect your interests and maintain trust in your business relationships.

Understanding Fiduciary Duty

Fiduciary duty is a legal obligation for one party to act in the best interest of another.

This responsibility often arises in relationships where trust and confidence are paramount, such as between an attorney and client, a trustee and beneficiary, or a corporate board member and shareholders.



The duty is critical because it ensures that the fiduciary, the party entrusted with the duty, acts selflessly and with integrity, prioritizing the interests of the principal, the party relying on the fiduciary, over their own interests.

There are mainly two components to fiduciary duty:

  1. Duty of Care: This requires the fiduciary to act prudently and reasonably in making decisions on behalf of the principal, using all available information and resources.
  2. Duty of Loyalty: This compels the fiduciary to put the principal’s interests first, avoiding any conflicts of interest and ensuring that no actions are taken that could benefit the fiduciary at the principal’s expense.

In essence, understanding fiduciary duty is about recognizing the importance of trust and loyalty in certain professional and business relationships, and ensuring that this trust is upheld through careful, honest, and selfless action.

Potential Red Flags and Warning Signs of a Breach of Fiduciary Duty:

  • Unexplained Financial Transactions: Sudden or unaccounted for changes in finances, such as withdrawals, expenses, or losses that aren’t backed by valid reasons.
  • Secrecy and Limited Communication: A reluctance to share information, evasiveness when questioned, or consistent avoidance of transparency.
  • Frequent Role Overlaps: The same individual or entity handling multiple roles, leading to unchecked powers and potential conflicts of interest.
  • Lack of Documentation: Missing records, inadequate paperwork, or inconsistencies in reporting, suggesting decisions aren’t being tracked properly.
  • Unusual Favoritism: The fiduciary giving preferential treatment to certain parties without a clear rationale, possibly hinting at personal interests influencing decisions.
  • Shifts in Business Practices: Notable changes in operations, partnerships, or business practices that deviate from established norms without clear justification.
  • Complaints and Concerns: Multiple concerns or grievances raised by stakeholders, beneficiaries, or other parties involved in the relationship.
  • Resistance to Oversight: A fiduciary resisting audits, reviews, or checks, indicating a possible desire to hide improper actions.
  • Inconsistent Decision Making: Decisions that appear arbitrary or don’t align with the best interests of the principal or beneficiary.
  • Delay in Reporting: Consistently late or incomplete reporting, suggesting an attempt to mask or downplay certain actions or results.

Spotting these warning signs early can be crucial in mitigating damage and ensuring that the rights and interests of the principal are safeguarded.

Consequences of Breaching Fiduciary Duty

Legal Implications and Potential Penalties:

  • Lawsuits: The principal or affected parties may sue the fiduciary for breach of duty.
  • Damages: The court may order the fiduciary to pay compensation for any losses incurred.
  • Injunctions: Legal orders might be issued to prevent the fiduciary from continuing harmful activities.
  • Removal from Position: The fiduciary could be stripped of their responsibilities and position.
  • Criminal Charges: In severe cases, if fraud or embezzlement is involved, criminal charges might be filed.

Financial Repercussions for Businesses or Individuals:

  • Loss of Assets: Compensation and legal fees can lead to significant financial loss.
  • Decreased Profitability: Businesses may face reduced earnings due to disrupted operations or loss of trust.
  • Increased Legal Costs: Engaging in legal battles to resolve the breach can be expensive.
  • Asset Forfeiture: In certain cases, assets might be seized to repay damages.

Impact on Reputation and Trustworthiness:

  • Loss of Credibility: The breach can lead to a lasting stain on the fiduciary’s professional reputation.
  • Eroded Trust: Relationships with clients, partners, and stakeholders may be irreparably damaged.
  • Diminished Business Opportunities: Future collaborations or opportunities might be lost due to tarnished reputation.
  • Public Scrutiny: Particularly in high-profile cases, media coverage can amplify the negative impacts.

The consequences of breaching fiduciary duty are severe, emphasizing the importance of adherence to these responsibilities and swift action if a breach occurs.

Contact Us

If you believe there has been a breach of fiduciary duty or need legal guidance on any related matters, contact Dilendorf Law Firm at (212) 457-9797 or via email We’re here to assist and ensure your interests are protected.

Government Resources

  1. Superior Court Jury Instructions Breach of Fiduciary Duty
  2.  Notice of breach of fiduciary duty
  3. Breach of fiduciary duty
  4. Complaint For Breach Of Fiduciary Duty And Declaratory Relief
  5. The Real Estate Brokerage as Fiduciary: A Summary Review of What it Means and Why it Matters
  6. Charges Advisory Firm and Part-Owner for Breach of Fiduciary Duty in Connection with Use of Leveraged ETFs
  7. 29 U.S. Code § 1109 – Liability for breach of fiduciary duty
  8. Notice Of Breach Of Fiduciary Duty
  9. Breach of Fiduciary Duty: On Justifiable Expectations of Loyalty and Their Consequences
  10. Fiduciar Fiduciary Duty, Tort and Contr t and Contrast: A Primer on the Legal ast: A Primer on the Legal Malpractice Puzzle
  11. Fiduciary Duty And The Public Interest
  12. Fiduciary Duty of Disclosure Does Not Apply to Individual Transactions with Equityholders
  13. A Cautionary Tale: Fiduciary Breach As Legal Malpractice
  14. The Fiduciary Duty of Care: A Perversion of Words
  15. Claims Arising From A Breach Of A Fiduciary Duty
  16. Aiding and Abetting the Breach of Fiduciary Duty: New York Commercial Division Decisions Illuminate Standards for Proper Pleading
  17. Business Torts: Fiduciaries, Unfair Practices, & Trade Secrets: Establishing A Fiduciary
  18. Direct Creditor Claims for Br or Claims for Breach of Fiduciar each of Fiduciary Duty: Is they is, or is they ain’t? A Practitioner ‘s Notes From the Field
  19.  Breach Of Fiduciary Duty And The Defense Of Reliance On Experts
  20. LLC Member and Limited Partner Breach of Fiduciary Duty Claims: Direct or Derivative Actions
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