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The law protects the bankrupt corporations

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The bankruptcy laws and tax codes are designed to protect corportations at the expense of individuals. Many “become a millionaire” gurus will tell you that you need to form a corporation to protect your assets. There are also tax advantages in forming a corporation.

A new example can be found at the tagged blog:

More Clarity For Directors. With the adoption of the Chancery Court’s opinion in Trenwick, and its own opinion in Gheewalla, the Delaware Supreme Court has effectively endorsed the trend in recent Chancery Court decisions to limit certain efforts to expand the liability of directors of insolvent or nearly insolvent corporations. Nearly sixteen years have passed since the Chancery Court’s decision in Credit Lyonnais Bank Nederland, N.V. v. Pathe Communications Corp., 1991 WL 277613 (Del. Ch. 1991), introduced us to the terms “vicinity of insolvency” and “zone of insolvency.” Although the Delaware Supreme Court has left some questions open, these new decisions help provide meaningful guidance on how directors of financially troubled Delaware corporations should discharge their fiduciary duties. “

Franklin @ August 20, 2007

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