Corporate directors of a financially healthy and solvent company have a fiduciary responsibility solely to the corporation and its stockholders and do not have a duty to creditors beyond the contractual duty owed by the company. In today’s economy, many companies face unprecedented financial strains and, as the financial situation deteriorates and nears insolvency (aka [...]
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Directors’ Responsibilities Before and After Company Insolvency – Part II
In my last post I talked about the responsibilities that board members have to a company both before and after insolvency occurs. The list below provides some practical precautions for prudent directors in financially distressed companies to keep in mind. Below are some practical precautions that a prudent director of a financially distressed company should [...]