Cengage Advantage Books: Fundamentals of Business Law Today 10th Edition by Roger LeRoy Miller

Exercise 23

Fiduciary Duties of Partners. Karl Horvath, Hein Rüsen, and Carl Thomas formed a partnership, HRT Enterprises, to buy a manufacturing plant. Rüsen and Thomas leased the plant to their own company, Merkur Steel. Merkur then sublet the premises to other companies owned by Rüsen and Thomas. The rent that these companies paid to Merkur was higher than the rent from the arrangement. Rüsen and Thomas did not tell Horvath about the subleases. Did Rüsen and Thomas breach their fiduciary duties to HRT and Horvath? Discuss. [ Horvath v. HRT Enterprises, 489 Mich. App. 992, 800 N.W.2d 595 (2011)] (See Partnerships.)