Two of Reverend Martin Luther King Jr.’s children have commenced a lawsuit against their brother for wrongfully taking money out of the estate of their late mother without authorization and without providing information as to how that brother is managing the estate.
Specifically, both Bernice King and Martin Luther King III allege that their brother, Dexter King, took “substantial funds” out of the Coretta King Estate and “wrongfully appropriated” money from their father’s estate. Moreover, the two siblings say that Dexter King has “refused to provide [them] with information and documentation concerning the operations, actions and financial affairs of the [MLK estate] to which they are entitled” as shareholders.
Dexter King, as president and CEO of King, Inc., has the fiduciary duty to the shareholders of the corporation, Bernice and Martin III. As such, the fiduciary, Dexter, must act at all times in the best interest of the shareholders and shall not profit at the expense of the shareholders. A fiduciary is required to communicate to the shareholders all material facts known, or that the shareholder should know, in connection with the fiduciary relationship.
Fiduciaries often get sued because they do not understand their fiduciary duties and the laws and regulations that affect them. Disclosure oftentimes reduces litigation risk. Regular communication with shareholders and beneficiaries may eliminate a sense of mistrust that oftentimes festers and that can create otherwise avoidable conflicts.
It appears that the crux of the King litigation is whether or not Dexter both refused to call a meeting with his siblings to discuss King, Inc. and whether or not a transfer in the amount of $535,000.00 compromised Dexter’s fiduciary duties.
Regardless of how this is ultimately resolved, it is a warning to all fiduciaries of assets large and small to know your duties. You may wish to seek assistance from a legal professional to avoid these potentially risky situations.
By: Todd C. Ratner, Esquire
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