NYC Lawyers Corporate Fiduciary Duty Non Prosecution

The organization had experienced sustained operational losses and directed senior management to review alternative outsourcing models, vendor criteria, and workforce benchmarks in an effort to stabilize its financial position.

The client’s role involved reviewing operational data, preparing comparative analyses, and presenting recommendations through established internal governance channels, including committee review and board level reporting.

After new criteria were adopted, an internal stakeholder objected to the outcome and escalated the dispute by filing a criminal complaint with investigative authorities.

The complainant asserted that revised contract terms favored specific vendors and excluded incumbent partners, resulting in alleged financial harm to the organization.

Although no evidence of personal gain, side agreements, or undisclosed relationships was identified, the complaint sought to characterize a governance dispute as intentional criminal wrongdoing, triggering prosecutorial review.

The defense emphasized that all challenged decisions were made pursuant to delegated authority, internal review procedures, and documented policy objectives aimed at improving efficiency and long term viability.

Under New York law, criminal fiduciary liability requires proof of a duty violation accompanied by intent to cause harm or obtain improper benefit, along with demonstrable damage.

Counsel showed that rational, documented restructuring decisions, even when controversial, do not satisfy the threshold for criminal liability.

NYC lawyers conducted a detailed quantitative review comparing and post restructuring costs, including vendor pricing, labor expenditures, and operational efficiency metrics.

The analysis demonstrated that overall costs were reduced and that the restructuring aligned with the organization’s stated financial objectives.

This objective data directly undermined the allegation that the company suffered compensable financial harm as a result of the client’s actions.

Counsel reviewed internal emails, memoranda, and approval records demonstrating that the complainant had knowledge of, and in some instances participated in, the decision making process.

Several submitted materials were shown to omit relevant context or selectively present information inconsistent with contemporaneous internal documentation.

These findings weakened the reliability of the criminal allegations.

The defense highlighted the complete absence of evidence showing personal enrichment, concealed benefits, or third party kickbacks involving the client.

Investigators were reminded that adverse business outcomes or stakeholder dissatisfaction alone are insufficient to establish criminal intent under New York law.

The matter concluded with a prosecutorial declination, and the investigation was closed without charges.

This outcome reaffirmed that New York law does not criminalize good faith corporate decision making merely because it generates internal opposition or commercial disadvantage to certain stakeholders.