Bankruptcy Judge Neil Bason has a nice explanation of Fiduciary Duties in a bankruptcy case. See Solution Trust v. 2100 Grand LLC (In re AWTR Liquidation Inc.), 548 B.R. 300 (Bkrtcy, C.D. Cal, 2016)(Bason. J.)
C. Corporate Fiduciary Duties
Corporate fiduciary duties typically are divided into three categories (although the
last of these may be a sub-category):
Duty of care – This is the duty to exercise reasonable prudence in making
business judgments for the corporation, including gathering adequate
information and undertaking due consideration of the relevant issues.
See, e.g., Lamden v. La Jolla Shores Clubdominium Homeowners Assn.,
21 Cal.4th 249, 258 (1999) (“A director shall perform the duties of a
director … with such care, including reasonable inquiry, as an ordinarily
prudent person in a like position would use under similar circumstances.”). Continue reading