TABLE OF CONTENTS

• Jurisdiction: United States

TABLE OF CONTENTS

CHAPTER 1: Introduction to Deepening Insolvency .... 1

1. Generally...........................................................................1

2. Definition of Deepening Insolvency...................................3

3. Evolution of Deepening Insolvency Theory........................4

CHAPTER 2: Officer and Director Business Decisions and Fiduciary Duties...........................................7

1. Breach of Fiduciary Duty Generally...................................7

2. Nature of Fiduciary Duties Outside of Bankruptcy.............8

A. Historically....................................................................8

B. Definition of Fiduciary Duties..........................................8

C. Types of Fiduciary Duties..............................................10

3. Fiduciary Duties in Bankruptcy........................................14

4. Fiduciary Duties of Insolvent Corporations......................15

A. Generally.....................................................................15

B. Emerging Duties to Creditors.........................................17

C. Insolvency ................................................................... 18

D. Zone of Insolvency........................................................20

CHAPTER 3: Interplay between Breach of Fiduciary Duties and Deepening Insolvency Liability................................................................23

1. Deepening Insolvency Liability Resulting from a Breach of Fiduciary Duties...................................23

2. Deepening Insolvency Theory Overrides the Business Judgment Rule.............................................24

3. Previously Insolvent Corporations Cannot Be Injured Despite Breach of Fiduciary Duties..................................27

4. Deepening Insolvency Discourages Workouts..................28

5. Deepening Insolvency Is Hindsight..................................28

6. Deepening Insolvency Is Duplicative of Other Torts.........29

CHAPTER 4: The Tort Claim for Deepening insolvency..................................................33

1. Elements of a Deepening Insolvency Claim ..................... 33

A. Split of Authority on Culpability Element........................34

B. Harm to the Entity.........................................................36

C. Causation of Damages................................................... 37

2. Use of Deepening Insolvency Claims to Obtain Standing...........................................................41

3. Use of Deepening Insolvency Claim to Pursue Sizeable Damages.............................................44

CHAPTER 5: Deepening insolvency as a Theory of Damages....................................................45

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