Appellate Victory for Majority Shareholder and his Corporation in Alleged Freeze-Out Case

On March 16, 2010, the Massachusetts Appeals Court summarily affirmed a decision by Superior Court Judge Daniel Ford granting summary judgment in favor of a corporation and its majority shareholder, on claims of breach of fiduciary duty and wrongful termination brought by a former minority shareholder. The corporation and its majority shareholder were represented by Francis Dibble and Katy Robertson.

The Appeals Court ruled that, under the terms of a shareholders’ agreement and the corporation’s by-laws, the majority shareholder had the right to discharge the plaintiff from employment at any time. The court rejected the plaintiff’s claims that his discharge had been a breach of fiduciary duty, that he had been improperly “frozen out” of the corporation, or that the trial judge’s order requiring plaintiff to transfer his shares in the corporation to the majority shareholder was inequitable. The decision in D.R.P. v. W.F.C. is the seventh consecutive appellate victory obtained by BR&G attorneys. A copy of the Appeals Court opinion is available here.

BR&G also successfully resolved claims against the corporation’s corporate counsel in earlier proceedings in the case. Plaintiff claimed that the corporation’s attorneys had breached their fiduciary duties to him and conspired with the majority shareholder to freeze him out of the corporation. Superior Court Judge Constance Sweeney ruled that corporate counsel did not have an attorney-client relationship with plaintiff and that he had no reasonable expectation that corporate counsel would represent his interests as a minority shareholder. Plaintiff voluntarily dismissed his claims against the corporation’s attorneys after he failed to convince the Appeals Court to reverse Judge Sweeney’s decision, which had made evident that his claims against the corporation’s counsel were untenable.