The 'Creditors' Interests Duty': When Does it Arise and What Does it Require?

Abstract

Creditors—particularly unsecured creditors—are vulnerable when a company becomes insolvent. A number of mechanisms have evolved to protect unsecured creditors, one of which is the duty of directors to consider (or act in) the interests of creditors when the company approaches insolvency, now contained in s.172(3) of the UK Companies Act 2006.