Zone of Insolvency

A kind of “twilight zone” somewhere near actual insolvency or maybe even all the way there. In any event a very dangerous place for officers and directors of the debtor, and increasingly their professionals, where their fiduciary duties may extend to creditors as well as to the owners of the debtor. Recent Delaware jurisprudence has brought this concept into doubt, at least with respect to corporations governed by Delaware law.

See also Insolvent, Deepening Insolvency.

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