M&A Banker Liability for Fiduciary Duty Breach: Still “in Play” in North Carolina

By William Robinson

ABSTRACT

Investment banker liability for “aiding and abetting” a fiduciary duty breach gained attention in 2015 when the Delaware Supreme Court upheld a $76 million judgment against an investment bank for its role advising a corporate takeover target. North Carolina courts have never explicitly recognized this cause of action under state law, and that has led some courts and commentators to speculate that aiding-and-abetting fiduciary duty breach claims are not viable in North Carolina. This paper argues that conclusion is premature. A close analysis of the state’s case law reveals that these claims are indeed viable in North Carolina. Investment bankers advising North Carolina corporations on takeovers should therefore assume they are vulnerable to claims for aiding-and-abetting fiduciary duty breach. In the wake of the recent Delaware ruling, North Carolina corporations and their investment bankers will likely face these claims more often.