“… The early recognition of corporate fiduciary duties is briefly explored in Part I of this Article for the purpose of showing what would evolve into the relationship between corporate directors’ fiduciary duties and the judiciary’s rebuttable presumption of the business judgment rule. This rule is designed to provide some level of protection for corporate directors against lawsuits by disgruntled investors. Part II of this Article looks to the role of condominium associations, a relatively recent form of property ownership, as not-for-profit corporations charged with managing the condominium property. As discussed in Part III below, with the acceptance of condominium property as a form of ownership was a recognition that condominium association directors owed fiduciary duties to unit owners. This Article then examines, in Part IV, the impact of the Delaware Supreme Court’s decision in Smith v Van Gorkom, which led to the legislative enactment and judicial recognition of exculpatory clauses in corporate organizational documents protecting directors from liability. Within months of this Delaware decision, as discussed in Part V, the Illinois Supreme Court recognized in Kelley v Astor Investors, Inc that such exculpatory clauses in condominium declarations were enforceable. The remainder of this Article explores the subsequent cases in Illinois which have either followed or ignored Kelley …”
Kenneth Michaels, Breaches of Fiduciary Duty and Exculpatory Clauses in Illinois Condominium Declarations, 55 UIC Law Review 289 (2022).
First posted 2022-03-12 15:00:47
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