The Supreme Court decided that when a company’s insolvency was inevitable, the directors’ duties to creditors surpassed the directors’ duties to shareholders. But where should that line be drawn? When should a director consider that a company’s future is in jeopardy? Is there a sliding scale of competing interests which directors must have in mind as a company’s fortunes change? When is a dividend lawful and when is it a device to remove funds from a hopeless company?
Robert-Jan Temmink KC, Nicola Allsop and Turlough Stone consider the scope and extent of directors’ duties in the light of the recent decision in BTI.