The debate surrounding fiduciary duties owed to creditors by directors, especially in the vicinity of insolvency, has resurfaced in light of two court decisions in Canada and the United States. In this paper, we contribute to the discussion by looking at the issue from a corporate finance...

The debate surrounding fiduciary duties owed to creditors by directors, especially in the vicinity of insolvency, has resurfaced in light of two court decisions in Canada and the United States. In this paper, we contribute to the discussion by looking at the issue from a corporate finance...

This paper investigates the properties of various legal regimes when there is the opportunity for bankruptcy through debt. The key result is that, for a single tortfeasor, strict liability always yields less than the socially optimal level of care, while negligence will never do any worse than...