DELAWARE JOURNAL OF CORPORATE LAW ToL. 25 ou just suggested it before I got on when you talked about the new form of corporate transaction Let me go on and give you an example with RR Nabisco. Now,we didn 't have to worry about takeovers at RR Nabisco after the lbo because Sll billion, although it was 30 billion at one time of debt on our balance sheet is its own poison pill. So we didn't have that kind of problem But i want to talk about another issue. because in the takeover context, while the questions may not always be free from doubt and will likely depend on a myriad of facts, at least you know what the question is But in my own experience at RJR Nabisco, I found that there are times where directors of a Delaware company cannot even be sure what the question is much less the answer. And it,'s not clear sometimes whether a particular decision complies with one's fiduciary duties to stockholders or that a court will conclude it will And the one that I'm thinking about now is, that we had to deal with, is whether a fiduciary duty, a boards fiduciary duties, shift or may shift from ockholders to the corporation as a whole and its creditors if the company in the vicinity or the zone of insolvency MR. GOLDMAN: You're talking about MGM MR GOLDSTONE: Yes MR. GOLDMAN: Credit lyonnaise. MR GOLDSTONE: Yes. And what I'm talking about is, I'm thinking back and harkening to our own colloquy at our board, and as business people are listening to lawyers struggle through these concepts and in the end shaking their heads and going now, what was all this about and where was it supposed to take us? Because I guess at some times there are corporations who know when they're insolvent. But what is the zone of MR. GOLDMAN: It's when you're in the neighborhood MR GOLDSTONE: If you happen to be in the zone, do your duties shift or do you expect it to balance? And if you're in the zone, how do you know it? And is it a big zone or is it a little zone or is it like the strike zone? I mean, does it depend on who's calling balls and strikes? These are questions we had to struggle with for a long time. And I can tell you that our lawyers, as they discuss these matters, were as perplexed as our directors in listening to this, really, I don't think it was a very, in the end, very enlightening and clear process MR. GOLDMAN: Let me just respond to that, if I may, because I think that it is somewhat clear because what you're talking about is a footnote in this opinion where a remark was made about considering the total nterprise including creditors. And the idea was that you are to consider the total enterprise and not just the stockholders, and that's what the Chancellor12 DELAWARE JOURNAL OF CORPORATE LAW [Vol. 25 you just suggested it before I got on when you talked about the new form of corporate transaction. Let me go on and give you an example with RJR Nabisco. Now, we didn't have to worry about takeovers at RJR Nabisco after the LBO because $11 billion, although it was 30 billion at one time, of debt on our balance sheet is its own poison pill. So we didn't have that kind of problem. But I want to talk about another issue, because in the takeover context, while the questions may not always be free from doubt and will likely depend on a myriad of facts, at least you know what the question is. But in my own experience at RJR Nabisco, I found that there are times where directors of a Delaware company cannot even be sure what the question is much less the answer. And it's not clear sometimes whether a particular decision complies with one's fiduciary duties to stockholders or that a court will conclude it will. And the one that I'm thinking about now is, that we had to deal with, is whether a fiduciary duty, a board's fiduciary duties, shift or may shift from stockholders to the corporation as a whole and its creditors if the company is in the vicinity or the zone of insolvency. MR. GOLDMAN: You're talking about MGM. MR. GOLDSTONE: Yes. MR. GOLDMAN: Credit Lyonnaise. MR. GOLDSTONE: Yes. And what I'm talking about is, I'm thinking back and harkening to our own colloquy at our board, and as business people are listening to lawyers struggle through these concepts and in the end shaking their heads and going now, what was all this about and where was it supposed to take us? Because I guess at some times there are corporations who know when they're insolvent. But what is the zone of insolvency? MR. GOLDMAN: It's when you're in the neighborhood. MR. GOLDSTONE: If you happen to be in the zone, do your duties shift or do you expect it to balance? And if you're in the zone, how do you know it? And is it a big zone or is it a little zone or is it like the strike zone? I mean, does it depend on who's calling balls and strikes? These are questions we had to struggle with for a long time. And I can tell you that our lawyers, as they discuss these matters, were as perplexed as our directors in listening to this, really, I don't think it was a very, in the end, very enlightening and clear process. MR. GOLDMAN: Let me just respond to that, if I may, because I think that it is somewhat clear because what you're talking about is a footnote in this opinion where a remark was made about considering the total enterprise including creditors. And the idea was that you are to consider the total enterprise and not just the stockholders, and that's what the Chancellor held