George Smith v. American Car & Foundry

Plaintiffs brought this action in two counts, averring, among other things, that defendants Daugherty, Richardson, Covert, Craig and Bates, acting as officers and directors of the Bank of Raymondville, received an offer from one William L. McKnight to purchase control of the bank; that the defendants, as directors and officers of the bank, thereafter took advantage of this offer, using their favored positions as directors and officers to advance the negotiations with McKnight and to accomplish the sale of stock (and control) to their personal profit at the expense of and to the exclusion of the plaintiffs. Plaintiffs further alleged that the defendants actions in breach of their fiduciary duties were committed knowingly, intentionally and in willful and reckless disregard of plaintiffs rights. There was a second count, upon which the trial court directed a verdict at the close of plaintiffs case, but we need not be concerned with Count II on this appeal.