Representing Closely Held Entities: Conflicts of Interest and Fiduciary Duty to a Company and its Principals
Documenting Corporate Authority; Avoiding Pitfalls When a Dispute Arises; Implied Attorney-Client Relationships; ABA Model Rules
Course Details
- smart_display Format
On-Demand
- signal_cellular_alt Difficulty Level
- work Practice Area
Corporate Law
- event Date
Wednesday, April 14, 2021
- schedule Time
1:00 p.m. ET./10:00 a.m. PT
- timer Program Length
90 minutes
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This 90-minute webinar is eligible in most states for 1.5 CLE credits.
This CLE course will examine practical, legal, and ethical issues confronting counsel when representing a closely held entity, including potential conflicts of interest and fiduciary duties owed to the company and its shareholders, members, officers, or directors. The panel will also discuss best practices for handling disputes between principals and guidance provided in the ABA Model Rules of Professional Conduct (the ABA Rules).
Ms. Bagger is an attorney, arbitrator, and mediator with significant experience addressing a broad range of commercial and business disputes, as an advocate and as a neutral. She has tried, arbitrated, and settled business cases of many different types, including complex contract claims, business torts, and shareholder and partner disputes. Ms. Bagger is a former Chair of the Massachusetts Board of Bar Overseers and has held leadership positions in the Boston and American Bar Associations. She writes and speaks about the legal, ethical, and practical issues that arise when representing closely-held entities and their constituents.
Mr. Fuerst is Co-Chair of the Firm's Business Divorce Practice. He brings substantial experience as a general counsel and business advisor representing closely held business organizations and their owners to his work in a wide array of industries. He is particularly well-versed in mergers and acquisitions and in business divorces. His efforts have included the disposition of assets in many U.S. states as well as numerous countries, including India, China, and Egypt.
With two decades of sophisticated and diverse trial and appellate experience, Ms. Nadel concentrates her practice on civil litigation across a broad spectrum of areas, with a focus on complex commercial and other business disputes, closely-held business and governance litigation, intellectual property, and civil rights litigation, and appeals in all areas of the law. She has represented individual and business clients in federal and state courts, before regulatory commissions and before state administrative tribunals, and in Tribal Court in a wide range of matters. She is often called upon to lead high stakes litigation and bet-the-company cases involving complex factual and legal issues.
When counsel represents a closely held entity (a corporation, LLC, or partnership in which there are a small number of owners and a substantial overlap between ownership and management), it can be difficult to discern whether conflicts of interest exist or where a fiduciary duty is owed.
Corporate counsel's first duty is to the company, but principals who retain counsel may view that attorney as their own. Counsel must clearly understand who is authorized to take action (instruct counsel) and confirm that necessary board actions and other corporate formalities are followed.
Even after counsel has delineated the scope of representation, intracompany disputes may change the dynamic. Practitioners must continually identify their actual client(s) under an attorney-client relationship, disclose any conflicts of interest to those parties, and obtain a conflict waiver if appropriate. Adopted in some form in most states, the ABA Rules are instructive in that regard.
Listen as our authoritative panel discusses the potential pitfalls of representing a closely held entity, including corporate governance and conflict concerns when representing a company and its principals. The panel will also examine the ABA Rules and how they might apply in certain fact scenarios.
- Identifying the client: corporation/company vs. members, shareholders, officers, directors
- Engagement letters: importance of disclosure and acknowledgment of representation
- Who holds, is within, and controls an entity's attorney-client privilege
- Documenting "duly authorized" officers
- Observing corporate formalities
- ABA Model Rules of Professional Conduct
- Special circumstances creating a duty to non-client constituents
- Best practices when disputes arise between constituents
The panel will review these and other key issues:
- When can counsel represent a corporate entity and its constituent shareholders, members, officers, or directors?
- How should counsel respond to actions or instructions from an officer of the entity when counsel does not think the action is in the company's best interest?
- When is an attorney-client relationship established under the ABA Rules?
- What steps should counsel take when a dispute arises between shareholders, officers, or directors of a company?
