Key takeaways:
- In what it called a "momentous" decision, the Supreme Court of the United Kingdom has confirmed that directors must take into account the interests of creditors when the company is insolvent.
- Although the Court provided some guidance on when prior to actual insolvency directors are required to consider creditors' interests, there remains some uncertainty over when the duty arises, and its content and scope.
- This uncertainty leaves directors of UK companies (and potentially those in other jurisdictions where the law tends to follow or adopt UK common law) in a potentially tricky position.
- Our article analyses what is now clear, identifies what issues still need consideration and suggests some practical guidance for directors to consider.
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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.