What remedies exist for breach of fiduciary duties by directors or officers?

• A. Damages, disgorgement of profits, rescission of improper transactions, injunctive relief, and constructive trusts.
• B. Only monetary penalties without equitable relief.
• C. Criminal penalties are the sole remedy.
• D. No remedies exist for fiduciary breaches.

Answer: (A)

Remedies for breach of fiduciary duties by directors or officers include both compensating the injured party and preventing the fiduciary from keeping any profits gained from the breach. Damages address actual losses or the value of the harm caused. Disgorgement of profits goes a step further, forcing the fiduciary to surrender profits earned through the breach so there’s no unjust enrichment. Rescission of improper transactions unwinds deals tainted by the breach, restoring the parties as much as possible to their pre-breach position. Injunctive relief can stop ongoing or future breaches, such as prohibiting self-dealing or requiring changes in conduct. Constructive trusts allow the court to treat ill-gotten gains as held for the benefit of the harmed party or corporation, ensuring recovery of misappropriated assets. These civil remedies can be combined, depending on the case, to both compensate and deter fiduciaries. Criminal penalties, if applicable, are separate and not the sole remedy for fiduciary breaches.