ses and limits of the directors’ duty to protect
债权人的利益——creditors’ interests
Actions for breach of duty have been and can, continue to be used to enable liquidators to enlarge the assets available to creditors on an insolvent liquidation. They may also be used to thwart directors from proving in the winding up. Further to that, the duty to take into account creditors’ interests circumscribes the power of the shareholders to ratify a breach of duty on the part of the directors since whenever the duty arises the law is clear that shareholders are unable to ratify directors’ actions. Finally, the existence of the duty to consider the interests of creditors means that there is the possibility, because of potential personal liability, that it will act as a deterrent as far as unscrupulous and reckless directors are concerned so that they do not take actions which may well affect creditors’ rights.
Undoubtedly, there are some disadvantages in pursuing a claim for a breach of duty. One of these is that a court is able where the claim is for breach of duty to grant relief to the respondent director under section 727 of the Companies Act 1985. This provision permits a court to, wholly or in part, relieve officers from liability in relation to proceedings for negligence, default, breach of duty, or breach of trust. The court may exercise its jurisdiction under section 727 only if it is satisfied that the person who sought relief had acted honestly, and reasonably, and that, having regard to all the circumstances of the case, he or she ought fairly to be excused. Thus, although the creditor may establish the existence of the duty and its breach by the director, the court may still exonerate him under section 727.
Further to that, even if a liquidator obtains an order from the court based on a breach of duty, the problem facing the liquidator is that the order has to be enforced against the directors who may be impecunious, rendering the proceedings useless. Thus, the existence of the duty may turn out valueless invoked as is usually the case when the company has become insolvent. This point stems from the fact that is that there is no plain statement in the case law on directors’ duties as to when the duty to creditors is triggered.
However, the biggest drawback with pursuing a claim for breach of duty probably is the fact that the fruits of a successful claim will be available to any secured creditor who has a floating charge over all present and future company property.
5 结论——5 Conclusion
There is a lot of public policy support for maintaining the existence of the directors’ duty to protect creditors’ interests, especially when the company’s financial basis is not secure. The protection provided by this duty should help bolster that afforded by other statutory devices such as wrongful trading (section 214 Insolvency Act 1986), adjustment provisions (Part IV Insolvency Act 1986), fraudulent trading (section 213 Insolvency Act 1986) and misfeasance (section 212 Insolvency Act 1986).
You can get help with your dissertation right now. Find out more...
Bibliography
议会立法——Statutes
Companies Act 1985
Insolvency Act 1986
案例——Cases
Brady v. Brady (1988) 3 B.C.C. 535.
Kinsela v. Russell Kinsela Pty Ltd (1986) 4 A.C.L.C. 215.
Liquidator of West Mercia Safetywear v. Dodd (1988) 4 B.C.C. 30.
Lonrho Ltd v.
本论文由英语论文网提供整理,提供论文代写,英语论文代写,代写论文,代写英语论文,代写留学生论文,代写英文论文,留学生论文代写相关核心关键词搜索。