When an LLC Manager Puts Personal Interests First

If you think an LLC manager broke the duties owed to your company, a breach of fiduciary duty claim may be worth reviewing. Florida members who suspect this often look for a breach of fiduciary duty LLC manager Florida attorney to review the facts. This page explains the duties, the conduct that often matters, and the records to gather first. KEW Legal is a Florida business law firm with offices in Coral Gables and Sunny Isles Beach. Kristina E. Wilson is the responsible lawyer for this page.

What Is a Breach of Fiduciary Duty Claim Against an LLC Manager?

A breach of fiduciary duty claim says a manager or member failed to meet the duties of loyalty and care they owe the company and its members.

Florida’s LLC statute sets these duties. Each manager of a manager-managed LLC, and each member of a member-managed LLC, owes them (Florida LLC standards of conduct). The duties run to the company and to its members, not only to the person who makes a decision.

The operating agreement shapes how these duties apply. It can set approval steps for certain transactions, but it has limits. It cannot eliminate the obligation of good faith and fair dealing (Florida LLC operating agreement rules).

This claim often fits minority members, co-owners, and investors who suspect self-dealing or poor management. It differs from a plain contract dispute. Still, the operating agreement often sits at the center of both.

What Conduct Commonly Supports a Claim?

Conduct that often supports a claim includes self-dealing, taking company money or opportunities, competing with the company, and reckless management.

• Self-dealing: a manager signs a deal with a company they own, or a lease or vendor deal that favors them.
• Diverted money: company revenue goes to personal accounts, or bonuses and expenses go unexplained.
• Taken opportunities: a deal that belonged to the company is pursued privately.
• Competition: a manager runs a side business that takes the company’s clients.
• Reckless management: deadlines are ignored, risks go uninsured, or spending is never approved, and the company suffers real loss.

Florida’s loyalty rule requires a manager to account for benefits gained from company property or a company opportunity. The manager must hold those benefits in trust for the company (Florida LLC standards of conduct). The duty of care targets grossly negligent or reckless conduct, willful misconduct, and knowing violations of law.

A deal with a related party is not automatically illegal, but the managers or members involved still owe fiduciary duties of loyalty and care to the company and its members. A conflict transaction is not void just because of the interest, if the statute’s requirements are met (conflict of interest transactions). Full disclosure and approval by disinterested managers matter here.

What Documents and Facts Shape the Claim?

The operating agreement, financial records, and written communications usually decide early whether a claim is viable.

• Operating agreement: duties, approval thresholds, related-party rules, and any limits on liability.
• Financial records: bank statements, general ledgers, tax returns, and payment history tied to the questioned transactions.
• Communications: emails, texts, and meeting minutes showing who knew what and when.
• Filings: records with the Florida Division of Corporations, plus written consents.
• Loss figures: calculations that link the conduct to a dollar amount.

A member in a member-managed LLC may inspect and copy company records. The member must give reasonable notice, and the inspection happens during regular business hours (Florida LLC records rules). If the company refuses, a circuit court may order inspection. If a court orders inspection or copying, it shall also order the company to pay the costs, including reasonable attorney fees, reasonably incurred by the member, manager, or other person seeking the records to obtain the order and enforce its rights, unless the company proves that it refused inspection in good faith because the company had a reasonable basis for doubt about the right of the member, manager, or such other person to inspect or copy the records demanded (court-ordered inspection).

In a manager-managed LLC, the inspection rules are written differently. The company type matters from the start.

Florida small businesses must file annual reports to keep active status (Division of Corporations FAQ). That filing history is useful to check.

Preserve what you have now. Don’t delete, edit, or move company files, and keep copies of your own messages.

How Does the Process Work at KEW Legal?

The process starts with a free, confidential first consultation. Next come document review, a written assessment, and then negotiation or litigation if the facts support it.

1. Free first consultation: we review your concern, the operating agreement, and the timeline. The first consultation is free and confidential, with no obligation to continue.
2. Document review: we separate provable conduct from suspicion, using the records listed above.
3. Written assessment: we explain the possible claims, the likely defenses, and the decisions ahead of you.
4. Demand or negotiation: where the facts fit, we send a formal demand, a records request, or open settlement talks.
5. Litigation if needed: a lawsuit may be direct, for harm to you, or derivative, for harm to the company.

A derivative claim usually requires a demand first: on the other members in a member-managed LLC, or on the managers in a manager-managed LLC. The managers or other members have a reasonable time, not to exceed 90 days, to act. The demand step can be skipped if it would be futile or if waiting would cause irreparable injury (derivative action rules). A derivative action also cannot be voluntarily dismissed or settled without court approval (dismissal or settlement rules).

A direct claim must plead and prove either an injury that is not solely the company’s, or an actual or threatened injury from a violation of a separate statutory or contractual duty owed by the wrongdoer to the member, even if the injury is in whole or in part the same as the company’s (direct action rules).

How long each stage takes depends on the facts, the records, and how the other side responds.

Why Work With KEW Legal on These Claims?

KEW Legal is a Florida business law firm with offices in Coral Gables and Sunny Isles Beach. The firm acts as outside general counsel for business owners and investors.

• The firm serves clients across Miami-Dade, Broward County, and South Florida.
• Governance disputes are reviewed alongside partnership, vendor, employee, and contract issues. These often arise together.
• Kristina E. Wilson is the responsible lawyer for this page. Natalie Martinez is also one of the firm’s lawyers.
• The firm’s focus includes partnership disputes, business contracts, commercial leases, business sales, and succession planning.
• Support staff handle scheduling, records logistics, and client communication.

Our review starts from your documents and the statute’s text. It does not begin from a predicted outcome.

What Questions Do Members Ask Most?

Most questions come down to who can sue, what the company can do, and whether a related-party deal is legal.

Talk With KEW Legal About Your Situation

If a manager moved company money, signed a side deal, or stopped sharing records, you need to know whether that conduct supports a claim. Call 305-990-2300 or send us a message to schedule a first consultation. Bring the operating agreement, the questioned transactions, and any written communications.