Duties of Directors of Insolvent Subsidiary
Prof. Bainbridge blogs about the recent decision of the Bankruptcy Court for the District of Delaware regarding the duties under Delaware law of directors of an insolvent susidiary. In re Scott Acquisition Corp., 2006 WL 1731277 (Bkrtcy. D.Del. 2006). Though he agrees with the result, the good professor cites Delaware Chancery Court decisions and his own prior articles on the topic to explain why the court should have framed the issue differently: "...the bankruptcy court should have concluded that the duties of direcors and officers of an insolvent subsidiary run to the creditors of the subsidiary."
Here is the link to the thoughtful analysis with full citations:
ProfessorBainbridge.com: Duties of Directors of an Insolvent Corporation
