Brian Quinn caught an important new Delaware Chancery Court decision (per VC Travis Laster), which significantly clarifies what happens to director/creditor relations when the corporatipn goes insolvent:
In its latest version (Quandrant v Vertin), the directors of an insolvent corporation engaged in highly risky transactions that, if successful, would have paid off handsomely for the controlling shareholder, and, if unsuccessful, would have left the corporation an empty shell. Creditors sought to hold directors liable for making risky decisions that would have benefitted the controller at their expense, they argued. This gave Vice Chancellor Laster an opportunity to put his spin on this issue:
I do not believe it is accurate any longer to say that the directors of an insolvent corporation owe fiduciary duties to creditors. It remains true that insolvency "marks a shift in Delaware law," butthat shift does not refer to an actual shift of duties to creditors (duties do not shift to creditors). Instead, the shift refers primarily to standing: upon a corporation's insolvency, its creditors gain standing to bring derivative actions for breach of fiduciary duty, something they may not do if the corporation is solvent, even if it is in the zone of insolvency (citations omitted) ...
The fiduciary duties that creditors gain derivative standing to enforce are not special duties to creditors, but rather the fiduciary duties that directors owe to the corporation to maximize its value for the benefit of all residual claimants.
That may seem subtle, but it's important.
He's right. Go read the whole thing.