Skip to main content Accessibility help
×
Hostname: page-component-586b7cd67f-tf8b9 Total loading time: 0 Render date: 2024-11-24T17:43:13.487Z Has data issue: false hasContentIssue false

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

Arthur B. Laby
Affiliation:
Rutgers University School of Law
Jacob Hale Russell
Affiliation:
Rutgers University School of Law
Get access

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.

Type
Chapter
Information
Publisher: Cambridge University Press
Print publication year: 2021

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Save book to Kindle

To save this book to your Kindle, first ensure [email protected] is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about saving to your Kindle.

Note you can select to save to either the @free.kindle.com or @kindle.com variations. ‘@free.kindle.com’ emails are free but can only be saved to your device when it is connected to wi-fi. ‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.

Find out more about the Kindle Personal Document Service.

Available formats
×

Save book to Dropbox

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Dropbox.

Available formats
×

Save book to Google Drive

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Google Drive.

Available formats
×