Richards Layton & Finger

Trenwick America Litigation Trust v. Ernst & Young LLP

August 11, 2008

One of the most debated theories of liability for directors, officers, lenders, professionals and agents in recent years has been “deepening insolvency.” Bankruptcy cases, as well as commentators, have addressed whether deepening insolvency is a cause of action, a damages theory or neither. While the cases up until now almost always were presented to bankruptcy courts, deepening insolvency, if it exists, is a matter of state law.

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