Donahue v. Rodd Electrotype Co.

From Conservapedia

In Donahue v. Rodd Electrotype Co., 328 N.E.2d 505 (Mass. 1975), the Supreme Judicial Court of Massachusetts held that stockholders in a close corporation owe one another substantially the same fiduciary duty in the operation of the enterprise that partners owe to one another.

Previously the Court had defined the standard of duty owed by partners to one another as the "utmost good faith and loyalty."^[1] Here the Court held that stockholders in close corporations must discharge their management and stockholder responsibilities in conformity with this strict good faith standard. They may not act out of avarice, expediency or self-interest in derogation of their duty of loyalty to the other stockholders and to the corporation.