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Bankruptcy Litigation

Examining the Interplay Between Exculpation Clause and Fiduciary Duty

In the case of In re Solutions Liquidation, the U.S. Bankruptcy Court for the District of Delaware adjudicated a motion to dismiss filed by the debtors’ former managers and officers in connection with the breach of fiduciary duty complaint filed against them by the trustee of the debtors’ liquidating trust.

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In the case of Liquidation Trust of Solutions Liquidation v. David Stienes (In re Solutions Liquidation), Case No. 16-10627 (CSS), Adv. Pro. No.: 18-50304 (CSS) (Bankr. D. Del. Oct. 21, 2019), the U.S. Bankruptcy Court for the District of Delaware examined the interplay between the scope and extent of a company’s exculpation clause versus the scope and extent of Delaware law regarding breach of fiduciary duty claims. In particular, the court’s decision adjudicated a motion to dismiss filed by the debtors’ former managers and officers in connection with the breach of fiduciary duty complaint filed against them by the trustee of the debtors’ liquidating trust.

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