Reshaping the Duties of Directors
Canadian Bar Review, Vol. 84, p. 365, 2005
12 Pages Posted: 13 Dec 2005
The decision of the Supreme Court of Canada in Peoples Department Stores Inc. (Trustee of) v. Wise addressed what some might regard as the two main duties of directors - the duty of loyalty and the duty of care. The court determined that (1) directors do not have a status fiduciary duty to corporate creditors where the corporation is approaching insolvency and (2), on the facts, the defendant directors did not breach their duty of care. While those conclusions are factually unremarkable, the conceptualization of the law by the court is problematic in a number of respects. Of particular concern is the court's analysis of the scope and operation of fiduciary responsibility. Generally, the importance of the issues addressed in the case will give it an enduring notoriety, both positive and negative, in Canadian corporate law.
Keywords: directors, fiduciary, duty of loyalty, duty of care, creditors
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