Fiduciary Duties

*Write a short essay, between 400 and 500 words, responding to the
> assignment below. You are expected to use the textbook and outside
> resources to provide accurate and substantive answers to the question.
> Also, be sure to make use of illustrating examples where appropriate.
> Submit your work in APA format. *
>
> Jimmy is the CEO of News Corp. His son, Johnny, runs Television Inc. One
> day Jimmy suggests that Johnny sell Television Inc. to News Corp. Jimmy
> and Johnny work together to radically inflate the value of Television Inc.
> Jimmy brings a proposal to the Board of Directors to buy Television Inc.
> for $500 million dollars even though the corporation is only worth $2
> million. The board of directors diligently examines the transaction, but
> due to clever forgeries, the board does not discover the radical inflation
> of the corporation. Jimmy never discloses his relationship with Johnny.
> The sale goes through, and it is shortly discovered that Television Inc.,
> is practically worthless.
>
> – A shareholder sues alleging that Jimmy violated his fiduciary duty of
> loyalty.
> – Additionally, the shareholder claims that the directors violated their
> fiduciary duties of care.
> – Is the shareholder correct?
>

……………..Answer Preview…………..

A fiduciary duty is a legal obligation that binds a given party to act in favor of another party’s interests (Cornell University Law School, 2015). The party being favored is referred to as the principal or entrustor, while the party mandated to take care of the obligation is known as the fiduciary. Fiduciary duties fall into two broad categories; the duty of loyalty and the other of care (Frankel, 1983). In the legal scene, they take several forms, such as wills, contracts and trusts. Shareholders therefore are classified as the principals……………..

APA

498 Words