Who has the burden of proof in claims of violations of the standards of good faith and fair dealing?
The rule in Massachusetts is that the burden of proving a breach of fiduciary duty is on the complaining party, the plaintiff. It has often been stated specifically that this burden is to prove “mismanagement or misappropriation of corporate assets.” The burden of proof does not shift to the defendants when the plaintiff can demonstrate the defendants have a conflict of interest and are on both sides of the transaction- the Commonwealth stands almost alone in placing the burden of proving unfairness on the complaining shareholder. Under certain circumstances, however, courts will deviate and find that the defendants have the burden of showing the inherent fairness from the viewpoint of the corporation and those interested therein.
