Former Officers and Directors of Chapter 11 Debtor
The liquidating trustee representing unsecured creditors of a Chapter 11 debtor sued former officers and directors for various transactions related to the corporation's retirement benefits plans. The plaintiff alleged that under applicable law the obligations of the defendants switched from being owed to the corporation to the corporation's creditors once the corporation entered a "zone of insolvency," and that the defendants had violated fiduciary duties owed to the unsecured creditors. He also alleged that the defendants' actions created a "deepening insolvency" for the corporation, thereby giving rise to a claim for that tort.
The court rejected decisions applying these rules and held that the zone of insolvency, fiduciary duty to creditors', and deepening insolvency theories espoused by plaintiff did not state cognizable claims under Ohio law.
Further proceedings are scheduled following the court's dismissal of the above claims.