The Georgia Court of Appeals highlights the importance of pairing a voidable transfer claim with a breach of fiduciary duty claim in a shareholder suit.

We often pair a breach of fiduciary duty count with a voidable transaction act count, which is sometimes redundant. However, in the recent case of Premier Residential SE LLC v. Silverstone Residential, LLC, 368 Ga. App. 142 (2023), the Court of Appeals affirmed a jury verdict on the fiduciary duty count but reversed the voidable transfer judgment.

          Premier Residential was a suit between three shareholders of an LLC. A minority shareholder claimed the other two shareholders, comprising the majority, had transferred real estate to businesses owned by majority shareholders without compensating the LLC. The trial court allowed the jury to decide the breach of fiduciary duty claim and the voidable transfer claim, and the jury found in favor of the minority on both claims.

          The Court of Appeals reversed the judgment on the voidable transfer claim, finding the minority shareholder did not have a “claim” against the LLC solely by virtue of being an affected shareholder. While not explicit in the opinion, it appears the Court of Appeals disregarded rights to future distributions or decreased value in the company from the transferred properties as a “claim” by the minority shareholder.

          Since the minority shareholder brought both counts, he was able to prevail on one even while losing on the other. This highlights the importance of hiring sophisticated business litigation attorneys, who know to assert alternative, and sometimes duplicative, counts to maximize relief.