[Emerging Issues In Directors And Officers Duties And Liabilities To Creditors: Does The Insolvency Act Of 1986 Provide Adequate Protection For Corporate Creditors?]

By

[Name of the institute]

ACKNOWLEDGEMENT

Many thanks to my family, friends, colleagues and my instructor as without their support and guidance, this project would not have been completed.

DECLARATION

I declare that this project shows my own work developed by a thorough analysis of the secondary research and primary research study. Moreover, this study has not been published before.

ABSTRACT

The aim of this research is to understand the issue about the Emerging Issues in Directors And Officers Duties and Liabilities to Creditors and how the insolvency act ensure protection of the creditors. The research used the secondary research analysis as the topic rewires a comprehensive review of the literature on the director's liabilities, creditor's protection issues and the challenges that the directors come across while fulfilling their duties. It was found that the insolvency act provides the protection to the corporate creditors by providing them loan securities; however the role of directors in this context is crucial as ensuring credit protection is the part of their duties beside the primary statutory and the fiduciary duties. This research will provide insight into the corporate credit industry, the corporations and the directors about the issue and challenges of corporate credit and how the credit protection contracts and directors can ensure credit protection for transparent credit transactions.

Table of Contents

ACKNOWLEDGEMENT1

DECLARATION2

ABSTRACT3

1.1 Background6

1.2 Aim of the Research6

1.3 Research Significance7

1.4 Research Objectives8

1.5 Research Questions8

1.6 Scope of the Study9

1.7 The Choice of Research Method9

1.8 Limitations and Delimitations10

CHAPTER 2: LITERATURE REVIEW11

2.1 Insolvency in the Legal Context11

2.2 The Effectiveness of Credit Protection12

2.3 The Issues of Credit Protection13

2.4 Credit Protection in Group15

2.5 Violation of Creditor Protection Provisions15

2.6 Duties of Corporate Directors and creditors16

2.7 Directors' Duties under UK Corporate Law19

2.8 Insolvency Act of 198622

2.9 The EU Insolvency Regulations23

2.10 The Missing Piece of Accountability for Directors25

CHAPTER 3: METHODOLOGY26

3.1 Research Design26

3.2 Research Execution27

3.3 Reason for Selecting the Secondary Research28

3.4 Secondary Data Selection Criteria28

3.4.1 The Law Cases Reports28

3.4.2 Scholarly Journals29

3.4.3 Literature Review Articles29

3.4.4 Reference Books29

3.5 Inclusion and Exclusion Criteria30

3.6 Data Analysis30

3.7 Validity and Reliability of the Research31

3.8 Limitations33

CHAPTER 4: FINDINGS AND ANALYSIS35

4.1 Challenges of Director's Common Law and Statutory Duties35

4.1.1 The Challenge of Management35

4.1.2 The Fiduciary Challenges35

4.1.3 The Challenge of the Duty of Diligence, Care and Skill36

4.1.4 The Challenge to Comply With the Law36

4.2 Issues of Acquiring and Distributing Share Capital by the Corporation36

4.3 Issues Related to the Protection of the Corporate Creditors37

4.4 Effectiveness of the Insolvency Act 198640

4.5 Transitional Framework for Insolvency42

4.6 Summary of the Findings44

CHAPTER 5: CONCLUSION AND DISCUSSION46

5.1 Reciprocal Trust47

5.2 Government Intervention for Credit Protection47

5.3 Recommendations for Future Research50

5.4 Conclusion52

BIBLIOGRAPHY54

CHAPTER 1: INTRODUCTION

1.1 Background

Creditor protection is intended as a protection of interests of persons in terms of minimizing the creditor risks. For the corporate creditors, there are risks of non fulfilment of the contract in accordance with performances (interest and principal payments from loan agreements, as well as purchase price liabilities from purchase contracts of the debtor. These risks can be distinguished according to information risk, ...