Deepening Insolvency Claims In Disguise
In the June 2006 issue of Insolvency Notes, we discussed the controversy surrounding another basis for potential liability of directors and officers — "deepening insolvency."
The theory of deepening insolvency is that recovery may be had from wrongdoers for an injury to a corporation caused by the fraudulent or negligent expansion of corporate debt and prolongation of corporate life.
For example, a deepening...
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