In the Bunker: Directors' and Officers' Conduct During a Time of Company Crisis
International Bar Association
March 26, 2010
James "Jim" Hohenstein- New York
Maritime and Bankruptcy and Creditors' Rights Partner James Hohenstein presented a paper titled, "In the Bunker: Directors' and Officers' Conduct During a Time of Company Crisis" at the IBA International Maritime Law Conference: Shipping in the New Financial Era.
When a company is insolvent, creditors look to any available "deep pocket," which can include a company's directors and officers. Indeed, as a company operates near insolvency or is insolvent, the creditors are entitled to the fiduciary obligations of directors and officers. While litigation against these individuals is all too common, most cases have a logical outcome: self-dealing, preferential treatment and fraud are punished but those who act in good faith, even if unsuccessful, will be vindicated. This paper examines the relevant issues under U.S. law. To read the full paper, please visit the link below.
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