Advice for directors and officers of distressed corporations: Fiduciary duties
While duties may not change whether their corporation is solvent or insolvent, exercising those duties becomes significantly more important when the corporation is confronting distress. With distress, directors and officers will be facing many more issues operationally and financially. Additionally, if the corporation is insolvent, creditors will not be repaid in full. When that happens, creditors often look for other ways to recover what they are owed and lawsuits for breaches of fiduciary duties is one avenue they may pursue.
*This article was originally published in InsideCounsel,