In an unusual move, the Delaware Court of Chancery has permitted a lawsuit seeking the appointment of a receiver for a solvent corporation, holding that the plaintiff’s allegations of fraud and gross mismanagement are sufficient to state a claim that could eventually lead to the appointment of a custodian. Typically, the Chancery Court will only appoint a receiver for a solvent company after it has adjudicated breach of fiduciary duty claims.
Vice Chancellor Donald F. Parsons Jr. issued the 15-page decision in Zutrau v. Jansing on Monday.
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