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contract cause of action will be dismissed for failure to state a claim for which relief can be


Claim for Aiding and Abetting Breach of Fiduciary Duty

Texas does not currently recognize a claim for aiding and abetting breach of fiduciary

duty, as such. Texas does recognize a claim for knowing participation in breach of fiduciary

duty, however.15 The Committee itself asserts that aiding/abetting and knowing participation are

one in the same. Response at 20. An action will not be dismissed for failure to state a claim

simply because the plaintiff misnames the claim. As the Fifth Circuit observed in Posey,

Rule 8(a)(2) merely requires that a plaintiff recite a “short and plain statement of the claim showing that the pleader is entitled to relief.” FED.R.CIV.P. 8(a)(2). “Such a statement must simply ‘give the defendant fair notice of what the plaintiff's claim is and the grounds upon which it rests.’ This simplified notice pleading standard relies on liberal discovery rules and summary judgment motions to define disputed facts and issues and to dispose of unmeritorious claims.” Swierkiewicz v. Sorema N.A., 534 U.S. 506, 512, 122 S.Ct. 992, 152 L.Ed.2d 1 (2002) (quoting Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)).

Posey, supra at 396. The complaint satisfies this generous pleading standard.

Grant Thornton also argues that the Complaint does not allege sufficient facts for a

“knowing participation” claim even using a “constructive” knowledge standard. Motion to

Dismiss at 13. The objection has merit, though for a slightly different reason than that suggested

by Grant Thornton. The Complaint does not sufficiently tie Grant Thornton’s conduct to any

wrongful conduct on the part of officers or directors of the debtor that would constitute a breach

of fiduciary duty. Specifically, the Committee alleges:

John C. Wooley, Jeffrey J. Wooley, Floor Mouthaan and Raymond A. Rodriguez breached their fiduciary duties of due care owed to the Debtors by, among other things, failing to ensure that Schlotzsky’s financial statements were prepared in accordance with GAAP and by failing to take action to prevent the Debtors’ deepening insolvency. Grant Thornton’s audit failure aided and abetted this conduct.


See Kinzbach Tool Co. v. Corbett-Wallace Corp., 160 S.W.2d 509, 514 (Tex. 1942). 11

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