This article is part two of a series on the fiduciary duties that Minnesota business owners owe to each other and their business:

  1. Minnesota Business Owners Owe Fiduciary Duties
  2. Breach of Fiduciary Duties in Minnesota
  3. Dealing with a Breach of Fiduciary Duties

Breach of Fiduciary Duties in Minnesota

Unfortunately, many business owners in Minnesota and across the nation breach their fiduciary duties. Although business owners may not know that the law imposes fiduciary duties on them, they generally know that what they are doing is not fair or expected by the other business owner. Often they justify their illegal actions with excuses like

  • “many other business owners do this”
  • “the other business owner did something wrong first”
  • “nobody will care; it’s not a big deal”
  • “I will repay the business later”
  • “no one will ever know”

Whatever the excuse, breach of fiduciary duty is it illegal in Minnesota and the consequences can be severe.

Consequences for Breach of Fiduciary Duties

Consequences for breach of fiduciary duties have included court orders requiring

  • repayment to the other business owners to fully compensate them for damages
  • payment of attorneys’ fees for the other parties
  • payment of court costs of the lawsuit
  • payment of sanctions, fines, or punitive damages
  • losing control of the business by placing another business owner in control of the business
  • restricting future business operations
  • denying a bankruptcy discharge of these financial obligations
  • criminal prosecution (when a criminal law has been violated)

Read the next article in this series: How Minnesota business owners can deal with a breach of fiduciary duties