In re Lemington Home: Third Circuit Extends Fiduciary Duties to Creditors of Insolvent Corporations, Recognizes "Deepening Insolvency" Cause of Action | Practical Law

In re Lemington Home: Third Circuit Extends Fiduciary Duties to Creditors of Insolvent Corporations, Recognizes "Deepening Insolvency" Cause of Action | Practical Law

On September 21, 2011, the US Court of Appeals for the Third Circuit held in In re: Lemington Home for the Aged that under Pennsylvania law, "deepening insolvency" supports an independent cause of action and directors of insolvent corporations owe duties directly to the corporation's creditors, both in contrast with Delware law.

In re Lemington Home: Third Circuit Extends Fiduciary Duties to Creditors of Insolvent Corporations, Recognizes "Deepening Insolvency" Cause of Action

by PLC Corporate & Securities and PLC Finance
Published on 05 Oct 2011 • Pennsylvania
On September 21, 2011, the US Court of Appeals for the Third Circuit held in In re: Lemington Home for the Aged that under Pennsylvania law, "deepening insolvency" supports an independent cause of action and directors of insolvent corporations owe duties directly to the corporation's creditors, both in contrast with Delware law.