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CEO, Chairman wants to start new company

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nettroy

Junior Member
What is the name of your state?What is the name of your state? CA

CA corp chairman and CEO wants to leave to start a new business which may compete with current business with current products and/or products unformally planned at current business. (CEO has large equity stake, so he would not seek current customers, employees or other property)

CEO is co-founder with a relative, which have grown apart as the business has evolved over the years. Directors are unable to resolve the issue, specifically the CEO is the brains and leader, the other co-founder (also an officer of the company) is close friends with the board.

1) If the CEO leaves, and the board is aware of his intentions are they violating their fiduciary responsibility by not attempting to retain the CEO and send the other relative packing?

2) Is the CEO violating his fiduciary responsibility by developing new and competing products for a new entity (after he leaves, but obviously some of the ideas had to come while employed at current entity)

Thanks
 



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