"To Thy Ownself Be True" (The M&A Journal)

February 2010
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Mr. Serota recently published an article in The M&A Journal titled, “To Thy Ownself Be True.” The article discussed directors’ fiduciary duties of insolvent corporations, and to whom such duties are owed, when the interests of the corporation conflict with the interests of creditors. Mr. Serota noted that in all cases directors must act in the best interests of the corporation, citing the Delaware Supreme Court holding in North American Catholic Educational Programming Foundation, Inc. v. Gheewalla that directors do not owe a direct fiduciary duty to creditors even in the case of insolvent corporations, and as a result the duties of directors, and to whom such duties are owed, does not change whether a corporation is solvent, insolvent or in the zone of insolvency.