On October 29, 2009, the California Court of Appeal, Sixth District, in Berg & Berg Enterprises, LLC v. Boyle, et al., unequivocally ruled that, under California law, directors of either an insolvent corporation or a corporation in the more elusively defined “zone of insolvency” do not owe a fiduciary duty of care or loyalty to creditors. In so ruling, California joins Delaware in clarifying directors’ duties when the corporation is insolvent or in the zone of insolvency.
Background
Filed under:
USA, California, Company & Commercial, Insolvency & Restructuring, Litigation, McDermott Will & Emery, Shareholder, Breach of contract, Fiduciary, Board of directors, Good faith, Duty of care, Delaware Court of Chancery, California courts of appeal, US District Court for Northern District of California
Authors:
Location:
Firm: