Representing Closely Held Entities: Conflicts of Interest and Fiduciary Duty to a Company and its Principals

Documenting Corporate Authority; Avoiding Pitfalls When a Dispute Arises; Implied Attorney-Client Relationships; ABA Model Rules

Recording of a 90-minute CLE video webinar with Q&A


Conducted on Wednesday, April 14, 2021

Recorded event now available

or call 1-800-926-7926
Course Materials

This CLE course will examine practical, legal, and ethical issues confronting counsel when representing a closely held entity, including potential conflicts of interest and fiduciary duties owed to the company and its shareholders, members, officers, or directors. The panel will also discuss best practices for handling disputes between principals and guidance provided in the ABA Model Rules of Professional Conduct (the ABA Rules).

Description

When counsel represents a closely held entity (a corporation, LLC, or partnership in which there are a small number of owners and a substantial overlap between ownership and management), it can be difficult to discern whether conflicts of interest exist or where a fiduciary duty is owed.

Corporate counsel's first duty is to the company, but principals who retain counsel may view that attorney as their own. Counsel must clearly understand who is authorized to take action (instruct counsel) and confirm that necessary board actions and other corporate formalities are followed.

Even after counsel has delineated the scope of representation, intracompany disputes may change the dynamic. Practitioners must continually identify their actual client(s) under an attorney-client relationship, disclose any conflicts of interest to those parties, and obtain a conflict waiver if appropriate. Adopted in some form in most states, the ABA Rules are instructive in that regard.

Listen as our authoritative panel discusses the potential pitfalls of representing a closely held entity, including corporate governance and conflict concerns when representing a company and its principals. The panel will also examine the ABA Rules and how they might apply in certain fact scenarios.

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Outline

  1. Identifying the client: corporation/company vs. members, shareholders, officers, directors
  2. Engagement letters: importance of disclosure and acknowledgment of representation
  3. Who holds, is within, and controls an entity's attorney-client privilege
  4. Documenting "duly authorized" officers
  5. Observing corporate formalities
  6. ABA Model Rules of Professional Conduct
  7. Special circumstances creating a duty to non-client constituents
  8. Best practices when disputes arise between constituents

Benefits

The panel will review these and other key issues:

  • When can counsel represent a corporate entity and its constituent shareholders, members, officers, or directors?
  • How should counsel respond to actions or instructions from an officer of the entity when counsel does not think the action is in the company's best interest?
  • When is an attorney-client relationship established under the ABA Rules?
  • What steps should counsel take when a dispute arises between shareholders, officers, or directors of a company?

Faculty

Bagger, Paula
Paula M. Bagger

Attorney
Law Office of Paula M. Bagger

Ms. Bagger has significant experience helping clients resolve a broad range of commercial and business disputes. She...  |  Read More

Fuerst, Steven
Steven B. Fuerst

Of Counsel
Lowenstein Sandler

Mr. Fuerst is Co-Chair of the Firm's Business Divorce Practice. He brings substantial experience as a general...  |  Read More

Nadel, Heidi
Heidi A. Nadel

Senior Counsel
Holland & Knight

With two decades of sophisticated and diverse trial and appellate experience, Ms. Nadel concentrates her practice on...  |  Read More

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