Zone of Insolvency: Where We Are Today
This memorandum discusses the fiduciary duties of directors of a Delaware corporation that is insolvent or in the "zone of insolvency." Among other things, it advises directors to act in the best interest of the corporation regardless of the financial condition of the corporation and to be especially mindful in distress situations to take actions that best advance the interest of the corporation as a whole, and not the interests of any particular constituency.