However, a corporation may avoid imputation of its agent's wrongful acts, and the in pari delicto defense, wilh die "adverse interest exception.
In die last four years, live major court decisions have addressed die auditor's use of in pari delicto lo defend against liability.
String on behalf of die company, alleged that KPMG wrongfully failed lo uncover uncollectible debts concealed by the company's president and CEO: For the adverse interest exception to apply and prevent ill pari delicto, the wrongdoing officer would have bad to totally abandon the corporation's best interests and act solely for his own benefit.
A Delaware court applied New York law in dismissing a case againsl an auditor asserting in pari delicto.
Although the common law doctrine of in pari delicto ("in equal fault") ordinarily prevented parties from challenging agreements they had helped negotiate, courts declined to invoke this bar, reasoning that participation by consumers and dealers in such contracts was involuntary, because manufacturers had used market power to impose such agreements against plaintiffs' will.
Finally, the model also informs and limits the scope of the in pari delicto defense recognized at common law, empowering dealers to challenge various agreements, whether or not "exclusionary," they knowingly entered, on the ground that any such agreement was not voluntary.
Third, courts considering assertions of the in pari delicto defense should abandon the assumption that manufacturers "force" dealers and consumers to accept provisions that reduce transaction costs or raise rivals' costs, given the Coasean paradigm's conclusion that manufacturers will share the fruits of such agreements with input owners.
Indeed, at common law, the doctrine of in pari delicto ("in equal fault") would have barred such challenges, preventing plaintiffs from profiting from their unlawful acts.
The defendants responded that a bankruptcy trustee stands in the shoes of the debtor and, thus, is subject to the in pari delicto defense, just as the debtor would have been in the absence of a bankruptcy.
The major changes with respect to assignability of tort claims in insolvency cases, and the prohibition of in pari delicto defenses as against an assignee for the benefit of creditors and his or her initial assignee (44) will no doubt be the subject of future litigation and more scholarly articles.
Lexis 5711 (2006), the court provided an excellent summation of the concept: "The doctrine of in pari delicto is an equitable doctrine that states 'a plaintiff who has participated in wrongdoing may not recover damages resulting from the wrongdoing.
Defendants pled a laundry list of equitable affirmative defenses, including estoppel, laches, waiver, unclean hands, and in pari delicto