Directors' duty to consider the interests of creditors and other stakeholders when there is a likelihood of insolvency

Abstract

Directive (EU) 2019/1023 on restructuring and insolvency requires member states to ensure that, where there is a likelihood of insolvency, directors have due regard for the interests of creditors, equity holders, and other stakeholders. In this paper, the author analyzes the legal position and interests of creditors and other stakeholders when there is a risk of insolvency and briefly addresses the legal mechanisms of corporate law that are directed to protect the interests of creditors and other stakeholders. The author also analyzes the content of directors' duty as required by the Directive and the constraints and legal challenges of enforcement of the directors' duty to act in the interests of creditors and other stakeholders.

Keywords

• directors' duties
• interests of creditors
• stakeholders
• vicinity of insolvency
• likelihood of insolvency