Corporations — fiduciary duty

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Wisconsin Supreme Court

Civil

Corporations — fiduciary duty

A complaint by minority shareholders that failed to allege an improper material benefit at the expense of the minority shareholders was properly dismissed.

“We conclude that Wis. Stat. § 180.0828(1) unequivocally sets forth the terms on which directors may be held liable for their decisions. It is both a substantive law and a procedural device by which to allocate a burden. Reget, 242 Wis. 2d 278, ¶¶17-18 (the rule ‘immunize[s] individual directors from liability and protects the board’s actions’ and ‘creates an evidentiary presumption that the acts of the board of directors were done in good faith’). As such, a party challenging the decision of a director must plead facts sufficient to plausibly show that they are entitled to relief, i.e., facts that show the director’s actions constituted: a ‘willful failure to deal fairly’ with a ‘shareholder[] in connection with a matter in which the director has a material conflict of interest’; a ‘violation of criminal law’; a ‘transaction from which the director derived an improper personal profit’; or ‘[w]illful misconduct.’ § 180.0828(1)(a)-(d). This is a straightforward application of notice pleading standards to the substantive law of the case because substantive law drives what facts must be pled.”

Reversed.

2012AP1967 Data Key Partners v. Permira Advisers LLC

Roggensack, J.

Attorneys: For Appellant: Taeuber, Stacy, Madison; Brualdi, Richard B., New York, NY; For Respondent: Sennett, Nancy J., Milwaukee; Wronski, Andrew J., Milwaukee; Pearson, Eric Gordon, Milwaukee; Park, Amy S., Palo Alto, Calif.; Horvath, Richard S., Jr., Palo Alto, Calif.