ABSTRACT
This is the first of several chapters that examine the obligation that directors have to take into account the interests of their company’s creditors when the company is insolvent or close to it. This chapter identifies the genesis of the obligation and explains how it has developed over the years. It focuses on explaining how the obligation has developed in the case law over many years and its ultimate preservation in s 172(3) of the Companies Act 2006. The chapter analyses the different stages of development of the obligation in the UK and in other jurisdictions. It focuses on the leading cases that have influenced the development of the obligation in the UK, namely the Court of Appeal decision in Liquidator of West Mercia Safetywear v Dodd and the recent decision of the UK Supreme Court in BTI 2014 LLC v Sequana SA. Importantly, the latter case has confirmed the existence of the obligation in UK law.
