Supreme Court Affirms Chancery Decision Rejecting Claims for Deepening Insolvency
The Delaware Supreme Court in a two-page Order issued on Aug. 14, 2007, (read here), affirmed the Chancery Court’s Trenwick decision of last year (summarized here and here on this blog), thus sounding the death knell in Delaware for the claim of "deepening insolvency" and casting aspersions on the concept of "the zone of involvency". See Trenwick America Litigation Trust v. Ernst & Young, L.L.P., 2006 WL 2333201 ( Del. Ch. 2006).
Here is an insightful commentary by Bob Eisenbach on his Business Bankruptcy Blog about the deeper implications of this confirmation of the Chancery Court’s opinion. [Query the impact of the Supreme Court’s affirmance on a federal decision (or the impact, if any, of the federal decision) that post-dated the Chancery decision and which was briefly summarized here.]