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Business Organizations Law

Cleveland State University

Law Faculty Articles and Essays

Wagoner rule

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Corporate Complicity Claims: Why There Is No Innocent Decison-Maker Exception To Imputing An Officer's Wrongdoing To A Bankrupt Corporation, Jonathan Witmer-Rich Jan 2006

Corporate Complicity Claims: Why There Is No Innocent Decison-Maker Exception To Imputing An Officer's Wrongdoing To A Bankrupt Corporation, Jonathan Witmer-Rich

Law Faculty Articles and Essays

This Article evaluates the innocent decision-maker exception in light of the doctrinal foundations of the in pari delicto defense and the Wagoner rule, general principles of agency law, and the lower court decisions that address these issues. It concludes that the innocent decision-maker exception is a doctrinal error, traceable to the logical misstep of a single lower court whose decision continues to be mistakenly followed. The innocent decision-maker exception is inconsistent with the basic principles of agency law that underlie imputation in the context of in pari delicto and the Wagoner rule. No court of appeals has explicitly addressed the ...