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Good News And Bad News For Corporate Managers

Law360 (November 1, 2007, 12:00 AM EDT) -- The good news: directors and officers of Delaware corporations are free from creditors’ direct breach of fiduciary duty claims.

Directors and officers of Delaware corporations face no liability to corporate creditors from direct claims for breach of fiduciary duty, under the Delaware Supreme Court’s recent ruling in North American Catholic Educational Programming Foundation Inc. v. Gheewalla, (May 18, 2007) ("North American Catholic").

Although management’s fiduciary duties to shareholders have been clear for many years, the issue of whether, and in what circumstances, a director or officer...
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