Landmark Decision in Delaware Bankruptcy Proceedings natlawreview.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from natlawreview.com Daily Mail and Mail on Sunday newspapers.
In early February, a Delaware bankruptcy judge set new precedent by granting a creditors’ committee derivative standing to pursue breach of fiduciary duty claims against a Delaware.
Creditors of distressed businesses are often frustrated by shareholder- controlled boards when directors pursue strategies that appear to be designed to benefit shareholders at the.
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Recent decisions and court commentary suggest that a creditors’ committee appointed in a Chapter 11 case should take immediate action to ensure that its rights to pursue derivative standing are preserved, particularly when the debtor is a limited liability company.
Introduction
This issue recently arose again in the Chapter 11 cases of The Collected Group, LLC and certain of its affiliates (together, Collected), filed in the United States Bankruptcy Court for the District of Delaware (the Court). During the first day hearing on Collected’s motion to approve debtor-in-possession financing, Judge Silverstein