On 5 October 2022, the UK Supreme Court confirmed that directors sometimes owe an extended duty to uphold the interests of a companys creditors when solvency is in doubt.
The precise circumstances in which this special duty is triggered will be more fully developed in future cases, but the Court ruled that merely a real risk of the company becoming insolvent is not enough to trigger it.
D&O insurers should brace for more claims alleging breach of this extended duty, as now endorsed by the Supreme Court.
The very existence of the special duty was at issue in this case. In what it described as a momentous decision going to the heart of company law, the Supreme Court unanimously agreed that this previously established principle should be u…
Read the full article at: https://kennedyslaw.com/thought-leadership/article/supreme-court-confirms-directors-extended-duty-to-protect-creditors/