Quadrant v. Vertin: Delaware Chancery Court Clarifies Fiduciary Duties of an Insolvent Company's Board of Directors | Practical Law
In Quadrant Structured Products Co., Ltd. v. Vertin, the Delaware Court of Chancery held that, when a company is insolvent, the business judgment rule generally applies to a non-independent board's decisions that are rationally designed to maximize the value of the company as a whole, even if the potential benefit to creditors and stockholders is disproportionate, while the entire fairness standard applies to board decisions that result in transfers of value from the insolvent company to its controlling stockholders.