In BTI 2014 LLC v SEQUANA (2022 UKSC 25 the Supreme Court say that Directors owe their duties to the company, rather than directly to shareholders or creditors of the company. There is not a free-standing duty owed to creditors. However, where the company is insolvent, or bordering on insolvency, then the interests of creditors as a general body should be considered even if , and balanced against the interests of shareholders. The greater the company’s financial difficulties the more  the directors should prioritise the interests of creditors when making for example to  pay a dividend and if so how much. Once insolvency is inevitable the  creditors’ interests become paramount.

This entry was posted on Tuesday, October 11th, 2022 at 8:53 am and is filed under Capital Finance and Companies. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.