The Contours and Content of the ‘Creditors’ Interests Duty’

To be published in the Journal of Corporate Law Studies, Vol. 21, 2021

U of Melbourne Legal Studies Research Paper No. 888

22 Pages Posted: 17 Jun 2020 Last revised: 25 Jun 2020

See all articles by Rosemary Teele Langford

Rosemary Teele Langford

University of Melbourne - Law School

Ian Ramsay

Melbourne Law School - University of Melbourne

Date Written: March 16, 2020

Abstract

It is well established in a number of Commonwealth jurisdictions that company directors are subject to a duty to consider the interests of creditors as the company nears insolvency. The precise contours of this duty are, however, indeterminate. Particular questions surround when the duty arises and what it requires of directors. Courts in the UK and Australia have provided different answers to these questions. This article critically examines jurisprudence from the UK and Australia and concludes that the position adopted by the England and Wales Court of Appeal is preferable.

Keywords: creditors’ interests duty; directors’ duties; duty to act in the interests of the company; Companies Act 2006 (UK) s 172(3); Corporations Act 2001 (Cth) s 181

Suggested Citation

Langford, Rosemary Teele and Ramsay, Ian, The Contours and Content of the ‘Creditors’ Interests Duty’ (March 16, 2020). To be published in the Journal of Corporate Law Studies, Vol. 21, 2021, U of Melbourne Legal Studies Research Paper No. 888, Available at SSRN: https://ssrn.com/abstract=3620683

Rosemary Teele Langford

University of Melbourne - Law School ( email )

University Square
185 Pelham Street, Carlton
Victoria, Victoria 3010
Australia

Ian Ramsay (Contact Author)

Melbourne Law School - University of Melbourne ( email )

University Square
185 Pelham Street, Carlton
Victoria, Victoria 3010
Australia
+61 3 8344 5332 (Phone)

HOME PAGE: http://law.unimelb.edu.au/about/staff/ian-ramsay

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