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Corporations - Receivers - Rights Of Creditors Or Receiver To Raise An Objection To Corporate Action Which Would Be Open To Shareholders, Jerome J. Dick
Corporations - Receivers - Rights Of Creditors Or Receiver To Raise An Objection To Corporate Action Which Would Be Open To Shareholders, Jerome J. Dick
Michigan Law Review
The writer will attempt to show that the courts, in spite of their language of fraud and breach of trust, are not applying the legal rules of fraud and trust relationship in allowing recovery to the creditor. The cases brought by the receiver for the benefit of creditors can be roughly divided into three broad groups: (1) instances where the court speaks of a trust relationship, holding that the corporation has breached the duty of trust to the creditors; (2) situations where the court speaks of some hazy principle of "fraud" on the creditors; (3) cases where the court forgets …