Clifford Chance

Financial Distress Triggered by the Impact of the Coronavirus - Tip Sheet for Financial Sponsor Appointed Directors in the US

April 3, 2020

The economic challenges brought about by the sudden and wide-ranging economic impact of the coronavirus have resulted in boards facing unprecedented situations and challenges ahead. Directors, irrespective of whether appointed by a financial sponsor or other stakeholder, need to act in accordance with their fiduciary duties, as determined by, among other things, the laws of a corporation's state of incorporation and a corporation's governing documents. This briefing aims to serve as a reminder of what those duties generally entail prior to and during financial distress, and highlight some of the key considerations and steps that can be taken by directors in ensuring that they continue to comply with their fiduciary duties.

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