Question:
I am member of a golf club. The Finance committee of the club decides that they can make some money by investing club funds with some equities
in the stock market. No legal opinion from anyone prior to this conduct.
a broker was selected by a local bank to begin investing for the club.No one other than a few members knew of this .
Scene two —a year later the clubs fund is down 1 million dollars.
Membership want to stop further investments of equities and wants to sell and take losses. Finance committee members want to hold on and “hopefully”regain the money. Membership votes to immediately get out of the equities. Are Finance committee members liable for breach of fiduciary duty in whole or in part for the one million loss?
– Tom
Answer:
Hi Tom,
Committee members frequently have protections under the governing documents of the association and its insurance policy. Check your governing documents and D&O policy to be sure.
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