Fiduciary duty a la Lyonnais: an economic perspective on corporate governance in a financially-distressed firm

Article Abstract:

Courts are beginning to recognize that the fiduciary obligations that corporate management owes shift away from shareholders and toward creditors as the corporation becomes increasingly financially distressed. The Delaware Chancery Court found in Credit Lyonnais Bank Nederlander v. Pathe Communications Corp. that the board of directors' fiduciary duties extended beyond the shareholders when the corporation approached insolvency. This more complex understanding of fiduciary duties is a departure from the standard shareholder wealth-maximization model.

Management Functions, Economic aspects, Management, Corporate governance, Debtor and creditor, Delaware

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An ounce of prevention: meeting the fiduciary duty to monitor an index fund through relationship investing

Article Abstract:

Pension fund fiduciaries should consider monitoring the performance of index funds because the Dept of Labor has not clearly stated that the fiduciary duty to monitor does not apply to passive investments. It is clear that the duty applies for all active investment strategies, but little case law or other guidance has been provided for broad-based equity investments. On the other hand, courts that are willing to accept modern portfolio theory may be willing to judge investments as a whole.

Index funds, Institutional investments

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A review of the historic foundations of broker-dealer liability for breach of fiduciary duty

Article Abstract:

The fiduciary duty of securities broker-dealers has not changed since the late 1930s when common law agency theories were supplemented by federal securities legislation and regulations. Courts which confuse the law should look at its historical development. The duty is not static and increases with control over accounts. The duty ranges from timely execution to nearly that of a trustee's duty in cases where brokers control discretionary accounts.

Securities dealers, Remedies, Securities fraud

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