Liability Beyond the Direct Breach

When fiduciaries violate their duties—putting their personal interests ahead of the companies or shareholders they’re obligated to protect—the harm rarely affects only the immediate actors. They almost always reverberate through every aspect of the business, sometimes for years.

Standards and litigation

Under Texas law, third parties who knowingly assist or encourage such breaches can themselves face significant liability.

Aiding and abetting breach of fiduciary duty broadens accountability, ensuring that those who enable fiduciary misconduct share responsibility for the damage caused.

At Hopkins Centrich, we regularly handle litigation involving aiding and abetting fiduciary breaches. We’ve seen firsthand how powerful this claim can be in holding responsible parties accountable and recovering meaningful damages for harmed clients.

Understanding Aiding & Abetting Liability under Texas Law

In Texas, successfully proving an aiding and abetting fiduciary breach claim generally requires establishing:

  1. Underlying Fiduciary Breach: First, you must show that a primary breach of fiduciary duty did in fact occur. This means establishing that a fiduciary failed to uphold their duty of loyalty, care, or candor, resulting in financial harm.
  2. Knowledge of the Fiduciary Relationship and Breach: The third party must have actual awareness of both the fiduciary relationship and that their actions are supporting or facilitating a breach. Mere suspicion or negligence typically isn't sufficient—actual knowledge or willful blindness is required.
  3. Substantial Assistance or Encouragement: There must be proof the third party actively assisted, encouraged, or enabled the breach in a substantial way. This assistance can be direct (advising or directly facilitating actions) or indirect (concealing or misrepresenting critical information).

Practical Examples of Aiding & Abetting Fiduciary Breach

Here are realistic examples of how aiding and abetting fiduciary breaches commonly found in the types of businesses Hopkins Centrich has experience with:

  • Complicit Financial Professionals: Accountants or financial advisors who knowingly prepare inaccurate financial statements, valuations, or misleading disclosures that enable majority shareholders to mislead minority investors or conceal fiduciary misconduct.
  • Legal Advisors and Improper Counsel: Attorneys who provide advice explicitly designed to enable majority shareholders to improperly squeeze out minority shareholders, circumvent voting procedures, or mask conflicts of interest.
  • Corporate Officers and Employees: Senior executives who knowingly assist fiduciaries (like board members or controlling shareholders) in concealing conflicts of interest, manipulating corporate records, or diverting business opportunities for personal gain.

Each of these are clear examples of people with clearly defined fiduciary responsibilities aiding and abetting shareholder oppression. In each case, the fiduciary misconduct of others could extend liability - significantly - beyond the primary wrongdoer to these other actors.

How Texas Courts Evaluate These Claims

Texas courts carefully scrutinize aiding and abetting claims, focusing heavily on evidence of actual knowledge and the defendant's intentional participation:

  • Courts often look at internal communications—emails, texts, and meeting notes—to establish what third parties knew and when they knew it.
  • Testimony from whistleblowers or former employees can dramatically clarify the degree of complicity or awareness by third parties.
  • Financial records demonstrating clear patterns—such as inflated invoices, excessive fees, or unexplained financial transfers—can also be decisive in these cases.

Because of this evidentiary burden, careful early documentation and strategic litigation planning are crucial.

Strategic Remedies Available

Litigating claims for aiding and abetting fiduciary breaches opens the door to meaningful remedies. Over the years, Hopkins Centrich has had many successes securing:

  • Monetary Damages: Recovery of profits unjustly gained by third-party enablers, lost profits suffered by clients, and compensatory damages reflecting the financial harm incurred.
  • Equitable Remedies (Constructive Trusts & Accounting Orders): Courts may impose constructive trusts to reclaim improperly obtained funds or assets. They may also order forensic accounting to uncover the full scope of assistance provided by the aiding party.
  • Injunctive Relief: Immediate court orders can halt ongoing misconduct or concealment, preventing further harm.
  • Punitive Damages: In cases of malicious or especially reckless assistance, courts may award exemplary damages designed specifically to punish wrongful conduct and deter future wrongdoing.

Litigation vs. Strategic Negotiation: Protecting Your Interests

At Hopkins Centrich, not every aiding and abetting fiduciary breach case automatically leads to protracted litigation. While we litigate aggressively when necessary, our initial approach often emphasizes negotiation or mediation to secure faster, more efficient, and equally effective resolutions:

  • Rapid Negotiated Settlements: Early settlement discussions can produce faster, confidential, and financially beneficial outcomes.
  • Leveraging Litigation Strategically: Filing claims and carefully timed litigation moves can significantly strengthen negotiation leverage, prompting opposing parties to settle rather than risk public exposure or court judgments.
  • Preserving Client Relationships: When desired, strategic negotiation can preserve long-term relationships and minimize disruption.

Our strategy always centers around what serves our clients best—whether swift settlements, private mediation, or hard-fought litigation.

Proactive Measures: Steps to Take if You Suspect Aiding & Abetting Liability

If you suspect third parties are enabling fiduciary breaches and in effect sabotaging your investment, these initiative-taking steps are critical:

  • Immediate Documentation: Preserve evidence—emails, financial records, contracts—that may demonstrate third-party complicity or knowledge.
  • Demand Transparency: Formally request relevant financial and operational documents to clarify potential complicity and evidence of assistance. Request it even if you’re ‘positive’ the owners and/or company will ‘never respond.’
  • Prompt Legal Consultation: Engage experienced counsel as soon as possible to evaluate potential claims, protect evidence, and prepare strategic responses.

Hopkins Centrich routinely counsels minority shareholders, business partners, and companies facing complex fiduciary disputes involving third-party misconduct.

Why Choose Hopkins Centrich for Aiding & Abetting Litigation?

  • Proven Record: Deep litigation experience in fiduciary duty claims, including complex aiding and abetting cases.
  • Strategic Advocacy: Exceptional skills in negotiation, mediation, and courtroom advocacy, ensuring our strategies match your business goals and interests.
  • Comprehensive Approach: We do more than litigate—we craft comprehensive solutions that protect your interests now and into the future.
  • Local Expertise and National Experience: Trusted counsel by out-of-state attorneys for litigation support across Texas.

Contact Hopkins Centrich Today

If you suspect third-party complicity in fiduciary breaches affecting your company or investment, you need seasoned, strategic legal support immediately. Don’t wait until the damage becomes irreparable.

Hopkins Centrich will evaluate your circumstances, provide clear strategic guidance, and aggressively pursue remedies that protect your business and personal interests.