Kittay v. Atlantic Bank (In Re Global Service Group LLC)

How courts have described this case

Verbatim parenthetical descriptions written by other courts when citing this decision. Ranked by citation-network relevance.

• “Deepening insolvency” refers to the ‘fraudulent prolongation of a corporation’s life beyond insolvency,’ resulting in damage to the corporation caused by increased debt.”
• unlike some jurisdictions, American law does not require company's management to file for bankruptcy, but leaves the decision up to proper business judgment
• “In fact, chapter 11 is based on the accepted notion that a business is worth more to everyone alive than dead.”
• “What began as a justification for recognizing the ‘adverse interest’ exception soon morphed into a theory of recovery.”
• “ ‘Deepening insolvency’ refers to the ‘fraudulent prolongation of a corporation’s life beyond insolvency,’ resulting in damage to the corporation caused by increased debt.”
• “[O]ne seeking to recover for ‘deepening insolvency’ must show that the defendant prolonged the company’s life in breach of a separate duty, or committed an actionable tort that contributed to the continued operation of a corporation and its increased debt.”

Source: CourtListener parenthetical corpus (CC0).