Fiduciary Duties Archives

When Do Fiduciary Duties Shift to Creditors in Texas?

Typically, a corporation's directors and officers only owe fiduciary duties to the corporation and its shareholders, but not to the corporation's creditors. However, Texas Courts have consistently held that fiduciary duties can shift from shareholders to creditors when the corporation begins to experience financial turmoil. Unfortunately, Texas Courts are split on what financial turmoil is enough to trigger this shift. This blog post will detail the split within the Texas Courts of when the shift of fiduciary duties is triggered.

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