A RECENT DELAWARE SUPREME COURT decision may have undermined cases against directors and officers of companies for actions they take just before they file for bankruptcy, such as increasing the company’s debt or signing major contracts with creditors.
The court ruled in May that creditors of a Delaware corporation that is insolvent or in the so-called “zone of insolvency” have no right to assert direct claims for breach of fiduciary duty against its directors. Some lawyers believe the decision eliminates the threat of suits that seek to recover from directors for actions they took shortly before bankruptcy.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.
For questions call 1-877-256-2472 or contact us at [email protected]
