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McLaughlin v. Schenk

Utah Supreme Court
220 P.3d 146 (Utah 2006)


In 1981, Greg Schenk (defendant) founded Cookietree, Inc., a closely held corporation. In 1992, Schenk hired Samuel McLaughlin (plaintiff) as an at-will employee. McLaughlin had significant experience in the baked goods industry and became Cookietree’s vice president. McLaughlin received an annual salary for his services. McLaughlin also received stock options and exercised those options to become a minority stockholder in Cookietree. In 2004, Schenk fired McLaughlin. McLaughlin continued to own his Cookietree stock after he was fired. McLaughlin sued Schenk, arguing that by firing McLaughlin, Schenk breached the fiduciary duty that he owed to McLaughlin as a minority shareholder in a close corporation. Schenk argued that he did not owe a fiduciary duty to McLaughlin. The trial court agreed and granted Schenk summary judgment on that ground. McLaughlin appealed.

Rule of Law


Holding and Reasoning (Durham, C.J.)

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