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Insider
Practical Law Glossary Item 8-382-3543 (Approx. 2 pages)
Glossary
Insider
This term has several meanings. In the context of:
- Bankruptcy, an insider of a corporate debtor is a:
- director, officer, or person in control of the debtor;
- partnership in which the debtor is a general partner;
- general partner of the debtor; or
- relative of a general partner, director, officer, or person in control of the debtor.
(§101(31), Bankruptcy Code.) Such persons or entities are in a position to influence the debtor's actions. Since they are so closely related to the debtor, transactions between the debtor and insiders are not considered arm's-length and are subject to the court's close scrutiny. - Securities and capital markets, a person with access to material information relating to a company before it is announced to the public and who has a duty to the issuer not to misuse such information. Directors, officers, and key employees have access to material non-public information by virtue of their positions and are considered insiders. Significant stockholders may be presumed to have this access and are likely to be considered insiders.