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My understanding is that corporations and their officers have the fiduciary duties of loyalty and care to stockholders, but not to debtholders.
Convertible notes are hybrid instruments; they are debt that is convertible into equity at the option of the holder at a predetermined rate. What level of fiduciary duty does a corporation have to holders of such instruments? That of a debtholder, an equity holder, or some "hybrid" level.
The law in the United States would not be uniform on this issue, but generally the officers and directors owe their fiduciary duties to the corporation rather than to the shareholders. The duties owed to shareholders are generally much more limited and context specific (e.g. in relation to distributions or take over offers).
The existence of a duty might also depend upon whether or not the notes were in default or the company was insolvent.
On the question of a corporation's fiduciary duty to convertible note holders, officers and directors generally owe duties to the corporation instead of shareholders. The officers and directors do owe duties to shareholders, though they are more context-specific and limited in scope.
A corporation’s directors owe duties of care and loyalty to shareholders, requiring them to exercise good business judgment and to show a standard of consistent care. Essentially, the standard care instructs directors to make a decision as if they are in the shoes of shareholders, instead of being a director able to profit off something that may adversely impact shareholders. If a certain decision may provide personal gain for a director, he must cede to the corporation.
The board of directors plays a role in appointing officers and upholding the fiduciary duties of shareholders, especially by delegating day-to-day decisions that impact the business's bottom line. These appointed officers act on the corporation's behalf and also owe a duty to act with care. The shareholders do not have direct control over the corporation, but they some indirect control in their meetings with directors and the board. Shareholders may also have the responsibility of forcing removal of officers or board members who breach their fiduciary duties to the shareholders.
All states have their own laws regarding how directors manage a corporation’s business and how the duty to act with care is serious and enforceable. Although questions such as who are managers for jurisdictional purposes may persist, it’s essential to ensure directors act with care.
