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Corporation's financial consultant breached fiduciary duty by entering into agreement on behalf of corporation without disclosing details to corporation's board of directors.
American Realty Trust Inc. v. Matisse Capital Partners LLC, 2003 WE 22965577 (5th Cir., Dec. 17, 2003). American Realty Trust, Inc. (ART) is a publicly traded Georgia corporation that is engaged in the real estate business. In the year 2000, ART approached defendant Matisse Capital Partners, LLC for help in obtaining new capital and financing for ART's operations. Matisse's two principals, Paul Bagley and Jack Takacs, had connections to Wall Street that could potentially help ART raise its standing and attain these goals.
ART and Matisse entered into a "Financial Consulting, Management and Marketing Agreement," pursuant to which Matisse was required to assist ART in arranging certain financing transactions in return for payment by ART of a monthly fee of $200,000 and, with regard to certain transactions, a percentage commission. Matisse's responsibilities included collaborating with ART to develop a list of financing projects to be pursued; preparing business plans, budgets, and analyses of the chosen projects; and assisting ART in …