Karten v. Woltin

This appeal presents the question of whether a minority shareholder could pursue as a direct action a claim for breach of *840fiduciary duty against the majority shareholders of a closely held corporation or whether, as the trial court concluded, he was required to file a derivative action. We find that, based on the facts in this case, the appellant was required to utilize a shareholder’s derivative action to pursue his cause of action.1

The appellant, Karten, and appellees, Woltin and Karmin, were shareholders in 201 East Atlantic, Inc., which owned and operated a restaurant, Louie Louie Too.…