Bridgeport holdings liquidating trust v boyer adatingnet com
Listen as our authoritative panel of attorneys explains the fiduciary duties of directors and officers when a company faces insolvency.
The panel will offer their perspectives on best practices to avoid and defend against breach of fiduciary duty lawsuits, including D&O insurance coverage issues that arise in bankruptcy. Cavior’s practice focuses on representing debtors and creditors under Chapter 11 of the U. Bankruptcy Code and in out-of-court financial restructurings. Cavior assisted in the successful reorganization of the third largest petrochemical company in the world.
Directors and officers must head off such claims because a breach of duty by directors and officers can lead to lawsuits against the corporation.
Case law, particularly the seminal Delaware case provides guidance on the fiduciary duties of directors and officers of companies facing bankruptcy and steps for directors and officers to shield themselves from liability.
Legal battles arise in bankruptcy over whether the proceeds of a D&O policy belong to the estate or the individual directors and officers.
Though they may have assumed they had adequate coverage, directors and officers may face significant out of pocket legal fees to establish their right to insurance proceeds.
The motions have much in common, and I will summarize each motion here: The Stengos Motion alleges that the Amended Complaint: (1) fails to state a claim for breach of duty against the Stengos directors; (2) fails to state a claim for aiding and abetting breaches of fiduciary duty against the Stengos directors; (3) fails to state a claim for aiding and abetting fiduciary duty breaches against Technical Olympic, S.
This single order addresses seven motions to dismiss by twenty defendants. Tex.2009) (simultaneously holding that fraudulent transfer occurred and finding defendants liable for aiding and abetting breaches of fiduciary duty in connection with the transfer because "[t]his [fraudulent] conduct is precisely what the law governing fiduciary duties is meant to deter").
It is possible that the directors may have breached their duty of care.
The complaint alleged that Micro Warehouse began experiencing financial difficulty in 2000.
After several years of declining financial performance, in early August 2003, the company concluded that its best option was to execute a sell strategy.
At that point, one of the directors called upon an acquaintance at another company, CDW Corporation ("CDW"), to talk about purchasing Micro Warehouse.
In late August 2003, the company formally retained a restructuring advisor and appointed him to the position of Chief Operating Officer.
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The Trust alleges that the independent directors breached their duty of loyalty when they approved Magnacca's appointment to the board of American Apparel, and then made him the point man to negotiate with Standard General with respect to the financing that allegedly led to Radio Shack's demise. First, why would Magnacca sacrifice his position as head of one of America's most "iconic" retailers in exchange for such paltry and illusory consideration?