In the current environment of increasing scrutiny of corporate behavior after corporate scandals such as Enron and Worldcom, lawsuits brought by creditors for breach of the fiduciary duties owed to them by officers and directors have increased significantly.
A Look At <i>Production Resources</i>
In the current environment of increasing scrutiny of corporate behavior after corporate scandals such as Enron and Worldcom, lawsuits brought by creditors for breach of the fiduciary duties owed to them by officers and directors have increased significantly. The suits are taking center stage on the dockets of bankruptcy courts and state courts alike, and receive much public attention across the country. Against this backdrop, the Delaware Court of Chancery's November opinion in <i>Production Resources Group, L.L.C. v. NCT Group, Inc.</i> is likely to be widely cited. This lengthy and scholarly opinion also is likely to be misconstrued by many bankruptcy practitioners as signaling a retreat from settled law that directors and officers of insolvent Delaware corporations owe fiduciary duties to creditors. This article demonstrates that such a reading of Production Resources is incorrect.
By
Russell C. SilbergliedKimberly D. NewmarchThis premium content is locked for LawJournalNewsletters subscribers only
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