Accepting Board-approved salary is not breach of fiduciary duty

A nonprofit CEO who accepted a substantial salary approved by the board of directors can not be sued for breach of fiduciary duty for taking excessive compensation, a Bankruptcy Court in New York City has ruled. But the CEO can be pursued for “limbo pay” used for personal expenses and not reported as additional compensation. The issues have arisen in the bankruptcy of WonderWork, Inc., a 501(c)(3) organization organized in 2011 under Delaware law to provide medical care and surgery for children in developing countries. After a series of set-backs, it filed for bankruptcy in December, 2016. The trustee of the WonderWork Litigation Trust filed suit against Brian Mullaney, the founder and...

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Accepting Board-approved salary is not breach of fiduciary duty

Accepting Board-approved salary is not breach of fiduciary duty