Q: Sue for beach of fiduciary duty in foreign-registered state of business?
I'm a shareholder in a Delaware corporation, but their headquarters is foreign-registered in another state. Our shareholder agreement stipulates "Governing Law" to be Delaware. Can I sue for breach of duty to loyalty in a state where they are foreign-registered, either New York or Oregon?
A: Choice of law is not choice of forum, which can also be selected by agreement. Thus, if document is silent, you can sue in NY.
A: The first thing you need to do is see if the shareholders agreement provides for the location where all disiputes are to be resolved. You also have to make sure the shareholders agreement does not provide for a specific method of resolving disputes such as arbitration. Assuming it is silent on both those issues and you reside in New York, then there should be no issue for you suing in New York. That being said, prior to bringing the suit, you should have an attorney review the shareholders agreement, because it is easy miss things in agreement when you are unsure what your looking for.
Barry E. Janay agrees with this answer
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A: A breach of fiduciary duty case can be very nuanced and before you go down that road you have a ton to consider. Sometimes an attorney demand letter will be sufficient to get you the results you seek without having to go the lawsuit route. Feel free to reach out to me privately to discuss further.
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