Fiduciary Duty Claim Dismissed In Absence of Proof That Defendant Was In a Position Giving Rise to a Fiduciary Duty

Fiduciary Duty Claim Dismissed In Absence of Proof That Defendant Was In a Position Giving Rise to a Fiduciary Duty

      In a recent decision from the Bankruptcy Court for the Western District of Kentucky (Judge Lloyd), there was dismissed on summary judgment a claim that the defendant in the adversary proceeding owed a fiduciary duty where the plaintiff had not shown that the individual was a director or officer of the subject company. In Re: Bullitt Utilities, Inc. (Keats v. Cogan), Case No. 15-34000(1)(7), AP No. 17-3070, 2020 WL 214761 (Bankr. W.D. Ky. Jan. 10, 2020). 

      This adversary proceeding arose out of the failure of Bullitt Utilities, Inc. The trustee asserted that Martin G. Cogan, identified by the court as “MC”, was a director/officer all Bullitt Utilities who breached his fiduciary duties in connection with its failure. In this instance, however, the suit was dismissed because there was a failure to demonstrate that MC was in fact a director or officer of the company. The primary evidence cited by the decision was the corporation’s annual report where, at one time, MC had been listed as a director, but then had been removed from that designation. The trustee relied upon certain meeting minutes that the court discounted. It was recited that the trustee had the burden of demonstrating MC’s status as an officer or director of Bullitt Utilities. The trustee failed to do so. In that the claim for breach of fiduciary duty was premised upon MC being an officer or director of Bullitt Utilities, the claim failed and was dismissed.