News & Analysis as of

Chapter 7 Creditors Fiduciary Duty

Proskauer Rose LLP

Conflict Between Delaware LLC Act and Bankruptcy Code Affects Creditor Toolbox

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As you know from our prior alerts, creditors of borrowers formed as Delaware LLCs (as opposed to corporations) lack standing under Delaware law to sue directors for breaching fiduciary duties even when, to the surprise of...more

Proskauer Rose LLP

Del. Bankruptcy Rulings Instruct on Creditors' Rights to Sue

Proskauer Rose LLP on

Creditors of distressed businesses are often frustrated by shareholder- controlled boards when directors pursue strategies that appear to be designed to benefit shareholders at the creditors' expense. In these...more

Proskauer Rose LLP

Suing Directors of a Troubled Business: When Form Trumps Substance

Proskauer Rose LLP on

Creditors of distressed businesses are often frustrated by shareholder-controlled boards when directors pursue strategies that appear to be designed to benefit shareholders at the creditors’ expense. In these circumstances,...more

Patterson Belknap Webb & Tyler LLP

Another Ruling on Public Auctions Versus Private Sales Under Section 363

Two weeks ago, we discussed asset sales under Bankruptcy Code section 363. As that post noted, section 363 requires court approval for asset sales outside the ordinary course of business, with courts ensuring that sales...more

Skadden, Arps, Slate, Meagher & Flom LLP

Bax Limits Standing to Pursue Derivative Claims in Bankruptcy

Since the Delaware Supreme Court held in CML V, LLC v. Bax that creditors of a Delaware LLC lack standing to pursue derivative breach-of-fiduciary-duty claims, even if the LLC is insolvent or near insolvent, bankruptcy courts...more

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