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Full-Text Articles in Law
The Duty To Creditors In Near-Insolvent Firms: Eliminating The "Near-Insolvency" Distinction, Cory D. Kandestin
The Duty To Creditors In Near-Insolvent Firms: Eliminating The "Near-Insolvency" Distinction, Cory D. Kandestin
Vanderbilt Law Review
'Even at our best, we are only out for ourselves." It is human nature to act in one's own interest. Though ethicists and psychologists may disagree about the extent to which self-interest is a motivating factor behind human behavior, most accept that it plays some role. Assuming that human behavior is at least in part a function of self-interest, laws should be expected to reflect that behavior. Many already do: the law of agency imposes a duty on the agent to act with obedience towards his principal, and the ABA Model Rules of Professional Conduct prohibit a lawyer from representing …
Shift Of Fiduciary Duty Upon Corporate Insolvency: Proper Scope Of Directors' Duty To Creditors, Laura Lin
Shift Of Fiduciary Duty Upon Corporate Insolvency: Proper Scope Of Directors' Duty To Creditors, Laura Lin
Vanderbilt Law Review
In the wake of the debt binge of the 1980s, the number of financially distressed corporations has increased dramatically.' Because a struggling company rarely ceases operations overnight, directors still need to make investment and operational decisions concerning the best use of the company's existing assets. This need remains whether the firm will regain profitability or will be liquidated. Financial distress also intensifies conflicts of interest between shareholders and creditors. Indeed, when these constituencies are unable to recover their investments in the corporation because of insufficient assets, both shareholders and creditors have incentives to maximize their individual returns regard- less of …