A while back I argued that former Berkshire-Hathaway executive likely violated the corporate opportunity doctrine by buying stock in Lubrizol before trying to persuade Berkshire to acquire Lubrizol.
M&A Law Prof blogger Brian JM Quinn analysed the issue and reached the same conclusion I did:
I think the case that Sokol, by buying ahead of Berkshire and then pushing the deal on his employer violated his duty of loyalty to the corporate by usurping a corporate opportunity. So what measure of damages is appropriate? Disgorgement of the approximately $3 million of profits he made on his $10 million investment would seem right. He should turn that over to Berkshire on his way out the door.
In reaching that conclusion, Quinn offers up a nice, concise summary of the relevant legal principles. Good read.
