ContractsProf Blog

Editor: D. A. Jeremy Telman
Valparaiso Univ. Law School

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Tuesday, March 17, 2009

Business Associations Limerick of the Week: Pedro v. Pedro

Pedros Pedros was a family business run by three brothers.  Alfred discovered that his brothers, Carl and Eugene were embezzling from the business, and he wouldn't shut up about it.  After two investigations, some funds could not be accounted for.  Carl and Eugene repeatedly warned Alfred to move on, but he refused.  Eventually, they were forced to tell employees that poor Alfred had suffered a nervous breakdown and would no longer be able to work.  I mean really -- what choice did they have?  He was also frozen out of the decision-making process and otherwise deprived of the benefits of his ownership share in the corporation. 

They court found that Carl and Eugene had violated their fiduciary duties to Alfred and ordered damages, including his reasonable expectation of lifetime employment, without any requriement that Alfred show that his brothers' misconduct caused actual harm to the corporation,

Pedro v. Pedro

Alred loved Carl and Eugene,
Though they thought him off his bean.
Their breaches frenetic
Made judges splenetic
So they paid for their freeze-out routine.

[Jeremy Telman]

http://lawprofessors.typepad.com/contractsprof_blog/2009/03/business-asso-2.html

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