Abstract

http://ssrn.com/abstract=880074
 
 

Footnotes (208)



 


 



Directors' Duties in Failing Firms


Larry E. Ribstein (Deceased)


University of Illinois College of Law; PERC - Property and Environment Research Center

Kelli A. Alces


Florida State University - College of Law

2007

Journal of Business and Technology Law, Vol. 1, No. 2, p. 529, 2007
FSU College of Law, Public Law Research Paper No. 234
U Illinois Law & Economics Research Paper No. LE06-004

Abstract:     
Despite many cases with seemingly contrary dicta, corporate directors of failing firms do not have special duties to creditors. This follows from the nature of fiduciary duties and of the business judgment rule. Under the business judgment rule, the directors have broad discretion to decide what to do and in whose interests to act. There is some authority for a limited creditor right to sue on behalf of the corporation to enforce this duty. However, any such right does not make the duty one owed to creditors. The creditors individually may sue the corporation for breach of specific contractual, tort and statutory duties, particularly on account of fraudulent conveyances. But the creditors are not owed general fiduciary protection even if they are subject to a special risk of abuse in failing firms.

Number of Pages in PDF File: 24

JEL Classification: K12, K20, K22, K35

Accepted Paper Series





Download This Paper

Date posted: February 2, 2006 ; Last revised: September 15, 2011

Suggested Citation

Ribstein (Deceased), Larry E. and Alces, Kelli A., Directors' Duties in Failing Firms (2007). Journal of Business and Technology Law, Vol. 1, No. 2, p. 529, 2007; FSU College of Law, Public Law Research Paper No. 234; U Illinois Law & Economics Research Paper No. LE06-004. Available at SSRN: http://ssrn.com/abstract=880074

Contact Information

Larry Edward Ribstein (Deceased) (Contact Author)
University of Illinois College of Law ( email )
504 E. Pennsylvania Avenue
Champaign, IL 61820
United States
217-244-9881 (Phone)
217-244-1478 (Fax)
PERC - Property and Environment Research Center
2048 Analysis Drive
Suite A
Bozeman, MT 59718
United States

Kelli A. Alces
Florida State University - College of Law ( email )
425 W. Jefferson Street
Tallahassee, FL 32306
United States
Feedback to SSRN


Paper statistics
Abstract Views: 5,673
Downloads: 903
Download Rank: 13,543
Footnotes:  208

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo1 in 0.329 seconds