A minority shareholder (Donnelly) sued a majority shareholder (Willis) for breach of fiduciary duty and contract after being denied promised stock ownership in two closely held corporations. The trial court awarded $1.7 million in damages for each claim plus a constructive trust on company assets. The appeals court upheld the fiduciary duty breach but reversed the contract damages award due to improper calculation, remanding for recalculation and requiring the trial court to choose between remedies to avoid double recovery.
Majority shareholders owe fiduciary duties to minority shareholders—you cannot deny promised ownership while keeping tax benefits and control, even if the minority shareholder initially agreed to the deal