When a corporation faces significant financial distress, its board of directors must carefully consider all potential strategic alternatives that may provide relief, including whether the corporation should pursue an in-court or out-of-court process.
Additionally, in evaluating different alternatives in the zone of insolvency, directors and officers must be mindful of their expanded fiduciary obligations to all stakeholders.
Writing in Navigating Today’s Environment: The Director’s and Officer’s Guide to Restructuring, a publication sponsored by FTI Consulting, DLA Piper attorneys Richard Chesley, Rachel Nanes and David Riley discuss corporate decision-making when a company becomes insolvent, and the liability management transactions that may provide financial relief without a bankruptcy filing. A concise excerpt from the chapter is available here.
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