Wagoner Doctrine

Wagoner Doctrine

The "Wagoner" Doctrine is a 2nd Circuit legal principle applying the longstanding common law "in pari delicto" (roughly translated "in equal fault") rule in the bankruptcy setting. Though controversial due to its willingness to bar recovery in what is typically considered an equitable poroceeding (i.e. bankruptcy) and thus not well accepted in other circuits, "Wagoner" holds that "a claim against a third party for defrauding a corporation with the cooperation of corporate management accrues to the creditors, and not to the guilty corporation."

See "in pari delicto" for more information.


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