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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
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Full-Text Articles in Law
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 …