Hastings Business Law Journal


Given the recent corporate scandals that have led to the demise of some colossal corporations, calls have sounded to impose fiduciary duties on directors and officers for the protection of corporate creditors before insolvency ensues. This note examines the soundness of this approach in light of a recent decision by the Delaware Court of Chancery. The author argues that imposing fiduciary duties for the benefit of corporate creditors before insolvency would be inimical to the object of wealth maximization and that creditors' interest should continue to be determined by their contractual agreements.