What is the scope of the tort of appropriation of corporate opportunity?
The tort of appropriation of corporate opportunity is a type of unfair competition law in Indiana. This law prohibits the appropriating of a corporate opportunity for personal gain instead of allowing it to be used for the benefit of the corporation. It is designed to protect the shareholders of a corporation from the misappropriation of corporate assets. Essentially, the tort of appropriation of corporate opportunity prevents a corporate director, officer, employee or related entity from taking advantage of a business opportunity that could otherwise benefit the corporation. For example, if a corporation finds out about a potential business opportunity that it could pursue, the director, officer, employee or related entity cannot pursue it for his or her personal gain instead of allowing the corporation to pursue it. The court will determine if the corporate opportunity was misappropriated by considering the nature of the opportunity, the connection between the opportunity and the corporation, the benefit that could be gained from the opportunity, and the potential detriment to the corporation. If a director, officer, employee or related entity is found to have wrongfully appropriated a corporate opportunity, the court may award damages, issue an injunction, or even order return of any financial benefit received. Overall, the scope of the tort of appropriation of corporate opportunity is quite broad. It is designed to protect the interests of shareholders of corporations by prohibiting individuals from exploiting corporate opportunities for personal gain.
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