A recurring theme in our columns is how directors’ and officers’ fiduciary duties are examined as the corporation approaches financial distress. In fact, we have been following the case long enough that today we report again on a U.S. Court of Appeals for the Third Circuit case styled Official Committee of Unsecured Creditors on Behalf of the Estate of Lemington Home for the Aged v. Baldwin, No. 13-2707 (3rd Cir. Jan. 26, 2015), that we wrote on more than three years ago.
In 2011, the Third Circuit reversed a decision by the U.S. District Court for the Western District of Pennsylvania granting summary judgment in favor of the defendants and remanded the matter for trial, which we wrote on at that time. Later, when the district court scheduled the case for trial, the defendants took action on mandamus to the court requesting that the trial schedule be relaxed. Finally, in a decision dated Jan. 26, the court considered an appeal from jury verdicts of liability and compensatory and punitive damage awards against the officers and directors of a nursing home facility that closed after filing for Chapter 11 back in 2005.
