There's an interesting balancing act occurring among directors of corporations that are teetering on insolvency right now. For companies operating in the black, corporate directors are beholdened to shareholders. Rick Tulli of Gardere Wynne Sewell says such fiduciary duties don't disappear when a company goes insolvent - instead creditors replace shareholders as the beneficiary of the directors' fiduciary duties. But determining the exact point at which a company becomes insolvent is not so easy, creating the prospect for directors to have to simultaneously answer to shareholders and creditors. “Although that shift happens only upon insolvency, it is often difficult to determine when the insolvency occurred, and may really be determined only in retrospect. Because of this, directors seeing significant concerns with the business need to start balancing the interests of the creditors along with the shareholders, because they will face increased scrutiny of their activities.” To interview Mr. Tulli about fiduciary duty issues, contact Rhonda Reddick at 800-559-4534 or rhonda@androvett.com.