Breach of Fiduciary Duties
Our client and certain fellow minority investors sold an electronic manufacturing services company, to a global electronic manufacturer which renamed the business. Two former executives with the selling company remained in the employ of the new company in lesser capacities. Upon the sale, our client executed a non-compete agreement, as did the two former executives as employees of the new company. Following the expiration of his non-compete agreement, our client invested in a new business, and hired the two executives to join him at his new firm. The company sued our client and the two executives for purportedly violating fiduciary duties, breaching contracts, and misappropriating the company’s trade secrets, employees and customer relationships. We assumed responsibility for this matter after a preliminary injunction hearing was held in which our client and the two executives were represented by prior counsel, at which an injunction was entered against one of the executives. Upon our entry into the matter, we moved for a judgment on the pleadings and secured the dismissal of three counts of the six-count complaint, preventing the company from pursuing any of our three clients in connection with the operations of the new business. We further obtained a dissolution of the injunction upon the executive, allowing him to serve as the chief executive of the new business. The company filed an interlocutory appeal of these rulings, but did not secure its requested emergent relief from the Kentucky Court of Appeals. The company opted not to pursue the remaining breach of fiduciary duty-related claims, and the case was dismissed in full.