As a business grows, so does its potential for profits and controversy. Business growth often means there is a need to enlist additional employees, and if the Ohio business is a corporation, it may mean there is a need to expand the company’s board of directors. With this increase in both profits and people, there is also the increased possibility for shareholder disputes.
One corporation, Wynn Resorts, has recently found itself at the center of a shareholder dispute. One of its shareholders, a pension fund, had filed suit against the corporation and its former CEO. According to the lawsuit, the former CEO abused and breached his fiduciary duties to the shareholders. Their complaint indicates that his actions resulted in financial loss to the shareholders.
The corporation itself is also named in the lawsuit. Again, according to the complaint, the corporation’s board of directors was aware of the CEO’s actions and failed to address them. It also indicates that the majority of the board holds a close personal relationship with the former CEO which may have affected how they chose to handle the reports of his action.
Each member of an Ohio company’s board of directors owes a fiduciary duty to the shareholders. It is the board’s responsibility to protect the company and to ensure that the company is operated in an appropriate, legally compliant manner. When these things do not happen, shareholder disputes are likely to occur. Experienced legal counsel can advise the company and its board of directors regarding the best way to avoid and, if necessary, address these concerns.
Source: cnbc.com, “Wynn Resorts board, former CEO Steve Wynn hit with shareholder lawsuit“, Jeff Daniels, Feb. 7, 2018
