Siegel v. Fitzgerald, 142 S. Ct. 1770 (June 6, 2022)
USA, Arbitration & ADR, Insolvency & Restructuring, Litigation, Frost Brown Todd LLP, US Congress, Supreme Court of the United States
The issue of whether directors, officers, and/or shareholders breached their fiduciary duties to a company prior to bankruptcy is commonly litigated in chapter 11 cases, as creditors look to additional sources for recovery, such as D&O insurance or “deep-pocket” shareholders, including private equity firms. The recent decision in In re AMC Investors, LLC, 637 B.R. 43 (Bankr. D. Del. 2022) provides a helpful reminder of the importance of timing in bringing such claims and the use by defendants of affirmative defenses to defeat those claims.