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38 Wayne L. Rev. 1323 (1991-1992)
The Phantom Fiduciary: The Debtor in Possession in Chapter 11

handle is hein.journals/waynlr38 and id is 1335 raw text is: THE PHANTOM FIDUCIARY: THE DEBTOR IN POSSESSION IN CHAPTER 11 THOMAS G. KELCHt It is not a something, but not a nothing either. The conclusion was only that a nothing would serve just as well as a something about which nothing could be said.' INTRODUCTION The debtor in possession in Chapter 11 functions as the sur- rogate for a trustee having fiduciary duties to many diverse con- stituencies, including shareholders and creditors.2 Because these constituencies compete for the limited resources of the Chapter 11 estate, their interests in benefitting from the fiduciary duty of the debtor in possession are in irreconcilable conflict.3 Creating a theory to resolve these conflicts is an issue that has puzzled both scholarly commentators and the courts. Consideration of this issue in scholarly articles focuses on the creation of a model of the fiduciary duty of the debtor in posses- sion explaining the content and application of this duty in the face of inherent conflicts among the beneficiaries of the duty.4 This endemic conflict creates a conceptual dilemma for the debtor in possession that must be resolved in order for the concept of the fiduciary duty of the debtor in possession to be intellectually satisfying and consistent with actual behavior in specific applica- tions. While the scholarly literature is insightful and useful, it does not meet the goals of providing concrete content to this fiduciary duty or furnishing a model that is predictive of behavior and results in judicial decisions. t Associate Professor of Law, Whittier College School of Law. I greatly appreciate the invaluable comments and criticisms of Frank R. Kennedy; the Honorable Samuel L. Bufford, United States Bankruptcy Judge, Central District of California; Howard Foss; and Michael K. Slattery. The views stated in this article should not, however, be attributed to them. I am also indebted for the help of Renee Heotis, a former student at Whittier College School of Law. 1. L. WrrTOENSTEIN, PHmosoPMCAL INVESTIGATIONS I para. 304 (G. An- scombe trans. 1968). 2. 11 U.S.C. § 1107 (1988). 3. See infra note 130. 4. See iflfra notes 140-83 and accompanying text. 1323

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