Trustee Found Not Liable for Co-Trustee’s Misappropriation

On November 6, 2023, Sher Tremonte prevailed on behalf of its client, a trustee, in a special proceeding involving a family trust. The successor trustee of the trust alleged that Sher Tremonte’s client had breached his fiduciary duties by failing to prevent his co-trustee from misappropriating trust assets to fund the co-trustee’s investment in a purported Mexican real-estate investment, which proved to be a scam. Sher Tremonte argued that its client had acted diligently to uncover and stop the misappropriation and, under the terms of the trust, could not be liable in the absence of fraud, gross negligence, or willful misconduct. The court agreed in full with Sher Tremonte’s arguments, denied all claims, and dismissed the case against the client: a total victory.

Sher Tremonte’s team included partner Justin Sher, counsel Justin Gunnell, associate Sam Prose, paralegal Chinoia Weir, and former paralegal Vincent Cavaliere.

Read the full opinion here.