Book contents
- Fiduciary Obligations in Business
- Fiduciary Obligations in Business
- Copyright page
- Dedication
- Contents
- Contributors
- Editors’ Acknowledgments
- Introduction The Decline and Rise of Fiduciary Obligations in Business
- Part I Identifying Fiduciaries and Their Duties
- Part II Gaps and Alternatives in Fiduciary Regimes
- Part III Historical and Comparative Perspectives
- 11 Delaware Corporate Law and the “End of History” in Creditor Protection
- 12 The Independent Director in Delaware and German Corporate Law
- 13 For Whom Are Nonprofit Managers Trustees? The Contractual Revolution in Charity Governance
- 14 Fiduciary Law and Japanese Nonprofits: A Historical and Comparative Synthesis
- Part IV Stakeholders and Society
- Index
11 - Delaware Corporate Law and the “End of History” in Creditor Protection
from Part III - Historical and Comparative Perspectives
Published online by Cambridge University Press: 20 August 2021
- Fiduciary Obligations in Business
- Fiduciary Obligations in Business
- Copyright page
- Dedication
- Contents
- Contributors
- Editors’ Acknowledgments
- Introduction The Decline and Rise of Fiduciary Obligations in Business
- Part I Identifying Fiduciaries and Their Duties
- Part II Gaps and Alternatives in Fiduciary Regimes
- Part III Historical and Comparative Perspectives
- 11 Delaware Corporate Law and the “End of History” in Creditor Protection
- 12 The Independent Director in Delaware and German Corporate Law
- 13 For Whom Are Nonprofit Managers Trustees? The Contractual Revolution in Charity Governance
- 14 Fiduciary Law and Japanese Nonprofits: A Historical and Comparative Synthesis
- Part IV Stakeholders and Society
- Index
Summary
In this Chapter, we survey the common law’s adventures with creditor protection over the course of American history with a special focus on Delaware. We examine the evolution of the equitable doctrines that judges have used to answer a question that arises time and again: What help, if any, should the common law be to creditors that suffer losses due to the purported carelessness or disloyalty of corporate directors and officers? Judges have struggled to answer that question, first deploying Judge Story’s “trust fund doctrine” and then molding fiduciary duty law to fashion a remedy for creditors. This reached a high point in the early 2000s as judges flirted with recognizing a “deepening insolvency.” Delaware’s judges effectively abandoned this project in a series of important decisions around the time of the financial crisis. In this “third generation,” judges told creditors to look to other areas of law to protect themselves from opportunistic misconduct, such as bankruptcy law, fraudulent transfer law, and their loan contracts. The question has arisen time and again and today’s “settled” law is unlikely to represent the end of history in creditor protection.
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- Fiduciary Obligations in Business , pp. 207 - 220Publisher: Cambridge University PressPrint publication year: 2021
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