## Facts

- Bright Tunes owned the copyright to “He’s So Fine” and sued George Harrison and affiliated entities in 1971, alleging “My Sweet Lord” infringed it.
- ABKCO and its president, Allen Klein, served as business managers for Harrison and handled aspects of the infringement dispute during the management relationship (Nov. 1970–Mar. 1973).
- After a bench trial, the district court found Harrison liable for infringement based on “subconscious” copying; damages issues remained.
- During later settlement efforts, Klein (no longer representing Harrison) negotiated with Bright Tunes and allegedly used confidential royalty and valuation information obtained during the prior fiduciary relationship.
- Before damages were resolved, Bright Tunes sold to ABKCO the “He’s So Fine” copyright and its litigation rights against Harrison for $587,000; ABKCO then pursued recovery against its former client.
- The Harrison interests counterclaimed that ABKCO and Klein breached fiduciary duties by exploiting confidential information and diverting a business opportunity.
- The district court found a fiduciary breach, limited ABKCO’s recovery, and imposed a constructive trust requiring ABKCO to hold the acquired rights for Harrison upon reimbursement of the purchase price plus interest.

## Issues

1. Whether ABKCO, as a former business manager and fiduciary, breached duties of loyalty and confidentiality by using information gained during the relationship to buy Bright Tunes’ rights and negotiate against Harrison.
2. Whether Harrison had to prove traditional but-for causation—i.e., that absent the breach he would have settled with Bright Tunes on materially better terms.
3. Whether a constructive trust was an appropriate remedy and, if so, how broadly it could extend to the rights ABKCO obtained (including foreign rights).

## Decision

- The Second Circuit affirmed the finding that ABKCO breached fiduciary duties owed to Harrison by using confidential information for ABKCO’s benefit and to Harrison’s detriment.
- The court rejected ABKCO’s argument that Harrison was required to prove a specific lost settlement as a strict causation prerequisite.
- The court held that a constructive trust over the “fruits” of ABKCO’s acquisition was proper in principle but modified the remedy to exclude certain foreign rights affected by other arrangements.
- The judgment was affirmed as modified and remanded for adjustments consistent with the narrowed constructive trust.

## Legal Principles

- A fiduciary must not use confidential information or opportunities obtained through the fiduciary relationship for personal gain and against the principal’s interests, even after the relationship ends.
- In fiduciary-breach cases, equity focuses on disloyal conduct and prevention of unjust enrichment; uncertainties caused by the breach are commonly resolved against the fiduciary rather than requiring strict proof of but-for causation.
- Constructive trust and disgorgement are available equitable remedies to prevent a faithless fiduciary from retaining benefits obtained through disloyalty.
- Equitable relief must be tailored to the misconduct and may be limited to avoid sweeping in rights or interests already resolved through separate arrangements.

## Conclusion

The Second Circuit held that ABKCO’s post-representation purchase and prosecution of Bright Tunes’ rights, aided by confidential information obtained while managing Harrison, breached fiduciary duties; equity therefore required a constructive trust over benefits derived from that acquisition, though the trust’s scope had to be narrowed to exclude certain foreign rights.


ABKCO Music, Inc. v. Harrisongs Music, Ltd., 722 F.2d 988 (2d Cir. 1983)