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What happens when your organization is ‘in the zone?’

In a troubled economy where businesses are struggling to survive, it is no surprise that many organizations find themselves insolvent or nearly insolvent. Directors of insolvent or nearly insolvent organizations are facing the question of to whom they owe their duty of loyalty, and whose best interest must they consider when making decisions. When in the zone of insolvency, directors still owe a duty to stakeholders to act in their best interests.

USA, Insolvency & Restructuring, Litigation, Bricker & Eckler LLP, Shareholder, Unsecured debt, Breach of contract, Fiduciary, Board of directors, Consideration, Economy, Duty of care, Delaware Supreme Court
Sixth Circuit Court of Appeals issues decision on defalcation

In an opinion issued May 12, 2009, the Sixth Circuit Court of Appeals determined that a Michigan contractor’s obligations to a subcontractor would not be discharged. Sameer Patel v. Shamrock Floorcovering Services, Inc. No. 08-1265.

USA, Michigan, Insolvency & Restructuring, Litigation, Bricker & Eckler LLP, General contractor, Independent contractor, Breach of contract, Fraud, Fiduciary, Subcontractor, Sixth Circuit
Court orders adverse inference instruction after defendants fail to preserve evidence

Centimark Corp. v. Pegnato & Pegnato Roof Mngt, Inc., Case No. 05-708 (W.D. Pa. May 6, 2008)

USA, Insolvency & Restructuring, Litigation, Bricker & Eckler LLP, Bankruptcy, Shareholder, Breach of contract, Board of directors, Federal Reporter, Discovery, Testimony, Withholding tax, Negligence, Prejudice, Spoliation of evidence, Third Circuit