Cases & Deals

Former CFO prevails in Third Circuit against fiduciary-duty and fraudulent-transfer claims

Clients Former CFO

Jones Day obtained dismissal of all claims asserted in an adversary proceeding against the former CFO of The Standard Register Company in connection with Standard Register's 2013 acquisition of a competitor company and its subsequent bankruptcy in 2015. The committee of unsecured creditors claimed that Standard Register's former directors and officers had breached their fiduciary duties of care and loyalty by preparing or relying on allegedly inaccurate financial projections. The trustee also sought to claw back certain transaction bonuses awarded in connection with the transaction. After the defendants moved to dismiss, the bankruptcy court dismissed the fiduciary-duty claims with prejudice and dismissed the claims for constructive fraudulent transfer in their entirety. The district court and then the Third Circuit affirmed dismissal.

In Re: SRC Liquidation LLC, et al., Nos. 17-03614 (3d Cir.), 1-16-cv-00119 (D. Del.); EisnerAmper LLP (SRC Liq. GUC Trust) v. Morgan, et al., No. 1-15-ap-50771 (Bankr. D. Del.)