When a corporation faces significant financial distress, its board of directors and management team must carefully consider all potential strategic alternatives that may provide relief, including whether the corporation should pursue an in-court or out-ofcourt process. In evaluating different alternatives in the zone of insolvency, directors and officers must be mindful of their expanded fiduciary obligations to all stakeholders. This chapter discusses corporate decision-making when a company becomes insolvent and the liability management transactions that may provide financial relief without a bankruptcy filing.

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