Kids International Corp. produced children\'s wear for Wal-Mart and other retail
ID: 443334 • Letter: K
Question
Kids International Corp. produced children's wear for Wal-Mart and other retailers. Gila Dweck was a Kids director and its chief executive officer. Because she felt that she was not paid enough for the company's success, she started another firm, Success Apparel, to compete with Kids. Success operated out of Kid's premises, used its employees, burrowed on its credit, took advantage of its business opportunities, and capitalized on its customer relationships. As an "administrative fee," Dweck paid Kids 1 percent of Success's total sales.
Question
Did Dweck breach any fiduciary duties? Explain.
Explanation / Answer
Fiduciary duty is a legal duty that is being acted solely in another's interests. A fiduciary has an obligation to consent principal before moving ahead with any major business decision.
As per the stated case, Ms. G started her own company just because she was not paid enough by Kids International. She didnt took consent from the principal (Kids International) and eventually operated out of Kid's premises, used its employees, borrowed on its credit and took advanatge of its business opportunities.
Hence, Dweck breach his fiduciary duties as didnt consent from principal and went ahead starting his own company.
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