Helen works as the vice-president of Gotspeed Corporation, a company that develops and sells sports shoes.Nestor, a private cobbler, makes a new model of shoes that help a user's feet grip the shoe better, and he calls it the Anklator.Nestor's friend fixes an appointment for him with Helen to present his shoe model for possible adoption by Gotspeed.Instead of bringing the opportunity to Gotspeed's board of directors and the corporation, Helen pays Nestor's asking price and purchases the Anklator model for herself.Helen leaves Gotspeed Corporation and forms her own company that manufactures and markets the Anklator shoe models.What breach of the duty of loyalty has Helen committed here?

Question

Quizplus · Accepted Answer

Helen breached the duty of loyalty by usurping a corporate opportunity. As the vice-president of Gotspeed Corporation, she had a fiduciary duty to bring the opportunity of Nestor's Anklator shoe model to the corporation and not to purchase it for herself. This is an example of self-dealing, where a director or officer of a corporation takes advantage of their position for their own personal gain. Additionally, by leaving Gotspeed Corporation and forming her own company to manufacture and market the Anklator shoe models, Helen is competing with the corporation, which is another breach of the duty of loyalty. However, the primary breach in this scenario is usurping a corporate opportunity.

Helen Works as the Vice-President of Gotspeed Corporation, a Company