Shareholder Agreement Fiduciary Duty

This case confirms that, except in unusual circumstances, members of a management team are unlikely to owe fiduciary duties to the selling shareholders from whom they buy. However, members of a management team must be vigilant about their behaviour when submitting an offer. They must ensure that by becoming potential buyers of the company, they do not violate their obligations to the company, either as directors or as employees under their service contracts. Management should therefore always seek legal advice at an early stage when proposing to make a takeover offer in order to contribute to the resolution of these potential conflicts. .