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The Delaware Court of Chancery Gives the Deep-Six to Deepening Insolvency
August 24, 2006 Full PDF
In the first state-level decision of its kind, the Delaware Court of Chancery recently refused to recognize "deepening insolvency" as an independent cause of action under Delaware law. In Trenwick America Litigation Trust v. Ernst & Young LLP, et al., the Court of Chancery granted a motion to dismiss a deepening insolvency count against former directors of an insolvent corporation.