Morgan & Posilippo Attorneys at Law
444 Castro Street Suite 900 Mountain View CA 94041 Tel (650) 969-4000 Fax (650) 969-6953
Richard Posilippo
Michael R. Morgan
October 6, 1999
Dear Mr. Leschyn:
Mary Paglieri questioned me regarding the duties of a member of the Board of Directors of a corporation to the corporation. She also requested that I communicate this information to you. I thought that I would make the contact in writing because conversations can be misinterpreted.
I understand that you have registered the domain name for Little Blue Society listing yourself as the Administrative Contact and your address as the mailing address. Apparently Mary has some concern that you may be reluctant to assign the Administrative Contact, if requested to do so by the Board of Directors, of which you are presently a member.
Under California law, a member of the Board of Directors of a corporation has a fiduciary relationship with the corporation. As a fiduciary, a Director may not do anything that might damage the corporation, nor may a Director usurp any present or expected corporate opportunity. The use of the name Little Blue Society is the sole and exclusive property of Little Blue. Use of that name for any purpose not specifically authorized by the Board of Directors would be a clear and egregious violation of a Director's fiduciary duty to the corporation. Such a violation can be enjoined by the Superior Court and/or result in an award of damages to the corporation.
While the fiduciary duty of a Director or Officer of a corporation begins when the position is accepted, it does not go away retroactively when a person severs his or her relationship. It even continues after the relationship is severed in many instances.
I hope that Mary's concerns are unfounded and that when requested by the Board of Directors, you will promptly assign the domain name to the person or entity named by the Board. It is always imprudent to violate the law, especially when it has been pointed out to you.
I might also point out that in your registration you identify the corporation as Little Blue Society, Inc. Its name on the Articles of Incorporation, as filed with the Secretary of Sate, is Little Blue Society, with no Inc
I anticipate that this clarifies you understanding, but if you have questions, I will be happy to make further clarification.
Sincerely, Michael R. Morgan
c: Board of Directors, Little Blue Society