If you are, or have interest in becoming, a director of any organization, you should heed the May 17, 2013, decision in the United States District Court for the Western District of Pennsylvania in Official Comm. Of Unsecured Creditors ex rel. Lemington Home for the Aged, (the Lemington Home Case). The Lemington Home Case upheld a jury’s award to the plaintiff creditors’ committee of

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.