Corporate Directors' Disqualification: The New Canadian Regime?

37 Pages Posted: 20 Feb 2009 Last revised: 26 Sep 2010

See all articles by Jassmine Girgis

Jassmine Girgis

University of Calgary, Faculty of Law

Date Written: July 2, 2009

Abstract

An insolvent time in a corporation’s life may compel directors to engage in reckless behaviour and wrongful conduct to hide the state of financial distress from creditors as the directors attempt to trade out of insolvency. Currently, Canadian legislation does little to protect from this type of situation. In this article, the author examines the different schemes in the United Kingdom, specifically directors’ personal liability and the director disqualification scheme, and argues that the disqualification scheme has been more successful for protecting creditors. The author then considers the Canadian provisions currently in place and concludes that the adoption of a disqualification scheme, especially under the federal insolvency power, should be seriously considered.

Keywords: corporate directors, disqualification, director liability, oppression remedy, insolvent trading, bankruptcy, insolvency, corporate insolvency, unfit directors

Suggested Citation

Girgis, Jassmine, Corporate Directors' Disqualification: The New Canadian Regime? (July 2, 2009). Alberta Law Review, Vol. 46, No. 3, 2009; CLEA 2009 Annual Meeting Paper. Available at SSRN: https://ssrn.com/abstract=1346589

Jassmine Girgis (Contact Author)

University of Calgary, Faculty of Law ( email )

Murray Fraser Hall
2500 University Dr. N.W.
Calgary, Alberta T2N 1N4
Canada

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