Don’t Throw Away Your Deepening Insolvency Materials: Harmonizing Brown Schools with Radnor Holdings and Post-CitX Case Law: Part II
Publication| Bankruptcy & Corporate Restructuring
The Brown Schools opinion dismissed a cause of action for deepening insolvency, but declined to dismiss a traditional cause of action for breach of fiduciary duty. In doing so, the court determined not to dismiss what the defendants called a “disguised” deepening insolvency claim, though the earlier decision of Radnor Holdings did just that. This article will focus on a different issue that these two cases both addressed and, once again, came to conclusions that at least on their face seem to differ: whether deepening insolvency may be a valid measure of damages for a separate tort.