Board's Actions Critical For Cos. In Zone Of Insolvency

Law360, New York (October 10, 2008, 12:00 AM EDT) -- In the months before its historic Sep. 15 Chapter 11 filing, Lehman Brothers Holdings Inc. was denying rumors and speculation about its ill-health – and sailing the treacherous waters of what is known in bankruptcy law as the zone of insolvency.

“There's no bright line,” William P. Smith, a partner at McDermott Will & Emery, said of the exact moment when talk of insolvency leads to a bankruptcy filing. “It happens at some point, but you don't know when it is.”

Although the point when talk...
To view the full article, register now.
Law360 Pro Say Podcast
Check out Law360's new podcast, Pro Say, which offers a weekly recap of both the biggest stories and hidden gems from the world of law.