Richard Hornshaw Quoted in Commercial Dispute Resolution on Supreme Court Decision
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In “Duty of care to creditors clarified by Supreme Court,” an article published by Commercial Dispute Resolution, Akin Gump international disputes practice head Richard Hornshaw has provided insight following a U.K. Supreme Court judgement handed down on October 5, 2022.
In BTI 2014 LLC v Sequana SA and others, the Supreme Court agreed unanimously that when directors know, or ought to know, that a company is insolvent or bordering on insolvency, or that an insolvent liquidation or administration is probable, their duty to consider the interests of creditors as well as the interests of members is triggered.
Hornshaw acknowledged in the article that “it is helpful for directors that the Supreme Court has now clarified that they will in certain circumstances owe a duty to take into account the interests of creditors when determining what course of action is in the best interests of the company.” However, it is also pointed out that questions remain, “uncertainty remains as to the exact moment when this duty to creditors arises – i.e. how imminent or probably an insolvency has to be, and to the extent to which directors’ actual knowledge of this eventuality is to be taken into account.”
The full article, published in Commercial Dispute Resolution, is available for subscribers to read here.
Read Akin Gump’s summary of the judgement here, authored by Richard Hornshaw, financial restructuring partners Emma Simmonds and Sam Brodie and associate Alexander Armytage and knowledge management counsel Lauren Pflueger.
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