eToys

Definition:

A well-known 2005 case EBC I, Inc. v. Goldman Sachs & Co., in which the official committee of unsecured creditors of the bankrupt internet retailer eToys, Inc. brought a suit against Goldman Sachs, the Managing Underwriter of the eToys IPO in 1999. The court ruled that, in some circumstances, the Lead Manager in a Firm Commitment Underwriting might owe fiduciary duties to the issuer. As a result of the case, Commitment Letters and Underwriting Agreements usually include provisions excluding any fiduciary duties.

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