At Foley’s sixth annual National Directors Institute on March 8, 2007 in Chicago, “Directors’ Duties in the Zone of Insolvency” was a featured breakout session. The panel was moderated by Foley & Lardner partners, Judy O’Neill and Michael Richman. Panel participants included Andrew Kramer, managing director, Restructuring and Growth Capital Group, UBS Securities LLC; Julia Darlow, former board member, Intermet Corporation; and Keith Marchiando, former chief financial officer, DURA Automotive.
Panelists for this session fielded questions related to their own experiences with companies that were in the zone of insolvency. They focused on what signs to watch for to determine if a company might be in the “zone,” how their decision processes were impacted once the company was in the zone, and what kind of legal or other independent expert advice they sought while in the zone. Discussions surfaced on the fiduciary duties of directors and officers, how those duties changed during the zone of insolvency, and how to ensure that they upheld their duties during the zone of insolvency.