What remedy do you have if you or your company is a creditor or shareholder of an insolvent Delaware corporation to recover amounts owed to you? Section 291 of the Delaware General Corporation Law (“DGCL”) provides a statutory basis to seek the appointment of a receiver over such company in order to pay outstanding debts of the company.
What Is the Process for Appointment of a Receiver of an Insolvent Corporation Under Section 291 of the DGCL?
Under Section 291, whenever a corporation is insolvent, any creditor or stockholder of a corporation may petition the Court of Chancery to appoint one or more persons to be receivers of the corporation.
What are the Functions of a Receiver of an Insolvent Corporation Under Section 291 of the DGCL?
- Take charge of the corporation's assets, estate, effects, business and affairs;
- Collect the outstanding debts, claims and property due and belonging to the corporation;
- Prosecute and defend, in the name of the corporation or otherwise, all claims or suits, to appoint an agent or agents under them; and
- Do all other acts that might be done by the corporation and be necessary or proper.
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