Outsiders May be Held Liable under Chapter 93A for Aiding and Abetting Immune Insiders

fidciary-duty

In Beninati v. Borghi, the Massachusetts Appeals Court recently vacated a judgment insulating an outside consultant, alleged to have aided and abetted insiders in violating their fiduciary duties, from Chapter 93A liability. The Appeals Court held that “intra-corporate dispute” doctrine absolved the insiders from multiple damages and attorneys’ fees, but did not absolve the outside consultant who assisted them in their breaches. This case arose from a dispute among owners of a chain of New England fitness clubs called Work Out World (WOW). The plaintiffs, members of a limited liability company that operated the WOW clubs, sued co-owners Stephen Borghi … Continue reading

BLS Judge Dismisses all Claims against Company’s Outside Counsel in Freeze Out Case

scales of justice

In Baker v. Wilmer Cutler Pickering Hale and Dorr, LLP, Judge Salinger dismissed all claims against outside counsel advising a company and its majority shareholder on a planned freeze out of a minority shareholder. The Court held that corporate attorneys generally owe no fiduciary duty to the individual shareholders of closely held corporations and were not liable for aiding and abetting a majority shareholder’s fiduciary duty even though the law firm had advised the majority shareholder that his actions were lawful. Judge Salinger also dismissed the plaintiff’s M.G.L. c. 93A claim against the attorneys. In Baker, minority members of ATT, … Continue reading