CHICAGO, IL - When personal relationships and business partnerships both dissolve, Illinois divorce cases can become complicated by breach of fiduciary duty claims between former business partners. Chicago divorce attorney Russell D. Knight of the Law Office of Russell D. Knight (https://rdklegal.com/fiduciary-duty-and-divorce-in-illinois/) explains how aggrieved business partners can protect their interests when a former partner's divorce threatens to transfer assets away from potential damage awards.
According to Chicago divorce attorney Russell D. Knight, business partnerships are almost always fiduciary relationships as a matter of fact under Illinois law. When one business partner breaches fiduciary duties through fraud or negligence, the aggrieved partner may seek compensation through breach of fiduciary duty claims. "To prove constructive fraud, a party must demonstrate a fiduciary relationship, a breach of the duties imposed by that relationship, and damages," explains Knight.
Chicago divorce attorney Russell D. Knight emphasizes that aggrieved business partners facing a situation where their former partner is getting divorced can include themselves in the divorce case to protect potential damage awards. Under 750 ILCS 5/403(d), courts may join additional parties necessary and proper for the exercise of their authority. "The aggrieved business partner does not want to see their potential damages award safely tucked away in their former business partner's ex-spouse's bank account," notes Knight.
Attorney Knight explains that once included in the divorce case, the aggrieved business partner can state a claim of breach of fiduciary duty against their former partner and potentially the soon-to-be ex-spouse. However, Illinois law does not recognize a method of imputing a fiduciary duty onto a third party. Instead, various causes of action exist that plaintiffs can bring against non-fiduciaries for their involvement in the unlawful acts of fiduciaries.
The firm handles complex divorce cases throughout Chicago and Cook County involving business disputes and third-party claims. To establish liability against a third-party spouse, the aggrieved business partner must specifically plead that the third-party spouse induced a breach of fiduciary duty. "A third party who induces a breach of a trustee's duty of loyalty, or participates in such a breach, or knowingly accepts any benefit from such a breach, becomes directly liable to the aggrieved party," Knight observes.
Knight advises that soon-to-be ex-spouses have a ready defense to such accusations. "They can argue they are divorcing the business partner for the same reason the business relationship dissolved—lack of trust," he points out. Furthermore, damages caused by the breach of fiduciary duty should be allocated to the fraudulent partner in the divorce settlement.
Illinois divorce courts must divide marital property in just proportions, considering all relevant factors, including each party's contribution to the acquisition or preservation of marital property. "Giving the spouse of a fraudulent business partner any responsibility for the fraudulent activity is simply unfair to all parties," Knight adds.
About Law Office of Russell D. Knight:
The Law Office of Russell D. Knight is a Chicago-based family law firm focused on divorce, custody disputes, and complex financial matters. Led by attorney Russell D. Knight, who has published more than 750 articles on Illinois family law, the firm provides direct client communication and strategic representation. For consultations, contact the Law Office of Russell D. Knight.
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Website: https://rdklegal.com/
