Reexamining the Fiduciary Paradigm at Corporate Insolvency and Dissolution : Defining Directors' Duties to Creditors

In re RegO Co. involved the classic conflict between mass products liability claims and corporate dissolution law and the so-called fiduciary duty to creditors. If the duty to creditors is created only at insolvency or dissolution, what principle of corporate law justifies the transformation? Are not contractual and commercial rights and priorities sufficient to safeguard creditors against management decisions which prefer stockholder expectancies at the interval of firm distress or demise? Are not bond-holders, creditors, lenders, and trade suppliers entitled to negotiate such creditor self-protection provisions in indenture and other contractual arrangements with the corporation? Does this fiduciary duty arise from, and is it co-extensive with, the common law contractual duty of good faith and fair dealing or is it is an independent corporate fiduciary obligation occurring at dissolution or insolvency