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- Creditor; fiduciary duty; shareholder; shareholder primacy; Delaware; insolvency; bankruptcy; zone of insolvency; bright-line; economics; trustee; corporation; Dodge v. Ford; Shlensky v. Wrigly; Katz v. Oak Industries; Unocal Corp. v. Mesa Petroleum Co.; Quadrant Structured Product Co. v. Vertin; North American Catholic Education Programming Foundation (1)
- Inc. v. Gheewalla; shareholder value maximization; business judgment rule; two-masters problem; decisionmaking; Credit Lyonnais; uncertainty; bankruptcy; risk; Smith v. Van Gorom; Stone v. Ritter; omission; Bankruptcy Code; In re The Brown Schools; Relativist approach; litigation; creditor protection; closely held corporations; corporate law; fixed value; fluctuating value; risk appetite; director duty; duty of care; duty to luqidate; contract law; creditor class; (1)
- Insider trading; insider trading legislation; market competition; wasteful competition (1)
Articles 1 - 2 of 2
Full-Text Articles in Law and Economics
Avoiding Wasteful Competition: Why Trading On Inside Information Should Be Illegal, Michael D. Guttentag
Avoiding Wasteful Competition: Why Trading On Inside Information Should Be Illegal, Michael D. Guttentag
Brooklyn Law Review
This article offers a new and compelling reason to make all trading based on inside information illegal. The value realized by trading on inside information is unusual in two respects. First, inside information is produced at little or no incremental cost and is nevertheless quite valuable. Second, profits made from trading on inside information come largely at the expense of others. When the value of something exceeds the cost to produce it, a wasteful race to be the first to capture the resulting surplus is likely to ensue. Similarly, resources expended solely to take something of value from others are …
A Rejection Of Absolutist Duties As A Barrier To Creditor Protection: Facilitating Directorial Decisivness Surrounding Insolvency Through The Business Judgment Rule, Philip Gavin
Brooklyn Journal of Corporate, Financial & Commercial Law
This Article draws attention to the difficulties that directors may face when seeking to discharge their duties as a corporation approaches insolvency, in particular when directors must discern the point at which a corporation has become insolvent. It argues that discretion allowed to directors by the business judgment rule will be crucial to overcoming these difficulties. To do this, this article examines the nature of duties owed by directors both before and after insolvency, and accepts the stance taken by Delaware courts in recent years towards an expansive understanding of a corporation’s interests upon insolvency. It then considers unresolved issues …