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Derivatives Standing Creditors

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

Mintz - Bankruptcy & Restructuring Viewpoints

Delaware Bankruptcy Court Grants Derivative Standing to Creditors’ Committee to Sue Members and Officers of Delaware LLC

In early February, a Delaware bankruptcy judge set new precedent by granting a creditors’ committee derivative standing to pursue breach of fiduciary duty claims against a Delaware LLC’s members and officers. At least three...more

Morris James LLP

Court Of Chancery Explains Creditor’s Right To File Fiduciary Duty Claims

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While it is generally known that creditors may only file derivative suits when the company is insolvent, there have been many open issues about what exactly that means. This decision answers many of those questions by...more

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