Gheewalla's Impact On Breach Of Fiduciary Duty

Law360 (June 19, 2007, 12:00 AM EDT) -- On May 18, 2007, the Delaware Supreme Court issued an important ruling addressing the fiduciary duties owed by directors of a corporation that is insolvent or in the “zone of insolvency.” (North American Catholic Educational Programming Foundation, Inc. v. Gheewalla et al. Appeal No. 521, 2006 from the Court of Chancery). The Court held that “creditors of a Delaware corporation that is either insolvent or in the zone of insolvency have no right, as a matter of law, to assert direct claims for breach of fiduciary...
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