## Facts

- North American Catholic Educational Programming Foundation, Inc. (NACEPF) held FCC radio spectrum licenses and contracted with Clearwire Holdings, Inc., a Delaware corporation, through a Master Use and Royalty Agreement governing potential future spectrum access rights.
- Clearwire relied on Goldman Sachs & Co. as its only funding source.
- NACEPF alleged that certain Clearwire directors affiliated with Goldman Sachs controlled Clearwire’s decisions and acted to advance Goldman Sachs’ interests rather than Clearwire’s interests.
- NACEPF asserted fiduciary-duty claims against the directors based on Clearwire’s alleged insolvency or “zone of insolvency,” and also asserted fraud and tortious-interference claims.
- NACEPF was not a shareholder and sued solely as a purported creditor.

## Issues

1. Whether creditors of a Delaware corporation that is insolvent or in the “zone of insolvency” have standing to bring direct fiduciary-duty claims against directors.
2. Whether creditors of an insolvent Delaware corporation have standing to bring derivative fiduciary-duty claims on behalf of the corporation.
3. Whether, absent a viable fiduciary-duty claim, Delaware’s director-consent statute (10 Del. C. § 3114) supplies personal jurisdiction over nonresident directors for related non-fiduciary claims.

## Decision

- The Delaware Supreme Court unanimously affirmed dismissal of the complaint.
- Creditors of a corporation that is insolvent or in the zone of insolvency have no right to assert direct claims for breach of fiduciary duty against directors.
- Creditors of an insolvent corporation have standing to assert derivative fiduciary-duty claims on behalf of the corporation.
- Because NACEPF pleaded only direct fiduciary-duty claims, it failed to state a cognizable fiduciary-duty claim as a matter of law.
- Without a viable fiduciary-duty claim, § 3114 did not provide personal jurisdiction over the nonresident directors for the remaining fraud and tortious-interference claims.

## Legal Principles

- Directors’ fiduciary duties are owed to the corporation and its shareholders; proximity to insolvency does not create a separate direct fiduciary duty to creditors.
- The “zone of insolvency” does not provide creditors with a new cause of action for direct fiduciary-duty claims.
- Insolvency does not create new fiduciary duties; it confers on creditors standing to pursue existing fiduciary-duty claims derivatively on the corporation’s behalf because creditors become residual claimants.
- Allowing direct creditor fiduciary suits during financial distress would expose directors to conflicting demands and impede the exercise of business judgment.
- Creditors’ protections primarily arise from contract and statutory and common-law remedies (including fraudulent transfer and bankruptcy-related protections), rather than direct fiduciary-duty suits.

## Conclusion

Delaware law bars creditors from bringing direct fiduciary-duty claims against directors whether a corporation is insolvent or near insolvency, while permitting creditors of an insolvent corporation to sue derivatively on the corporation’s behalf; a complaint that pleads only direct creditor fiduciary claims fails as a matter of law.


N. Am. Cath. Educ. Programming Found., Inc. v. Gheewalla, 930 A.2d 92 (Del. 2007)