Can Bankruptcy Trustees Sue Officers and Directors For Breach of Their Fiduciary Duties?
In the Stanziale v. Nachtomi case, a three-judge panel unanimously revived a lawsuit against the former officers and directors of defunct airline Tower Air Inc. In the litigation, the trustee claimed that executive officers and board members drove Tower into insolvency by indifference and egregious decision making. The appellate panel concluded that the U.S. District Court in Delaware erred by applying Delaware’s stricter Chancery 8 pleading standard and instead should have applied the more lenient federal “notice pleading” standard. Big Dog USA Inc., Santa Avenue, Ca., filed Chapter 11 in the U.S. Bankruptcy Court for the Central District of California. The firm listed assets of between $1 million and $10 million and liabilities of between $50 million and $100 million. The filing was under case number 09-15137. For more information contact the court at 866-522-6053. Graphic Arts Center Publishing Co. has seen a 12/22 creditors’ meeting scheduled regarding its Chapter 7 bankruptcy in t
