Directors’ Duties In The Insolvency Context

David Suttner and Daniel Teoh of HFW provide a briefing on a recent case which highlights that Australian directors may breach their section 181 good faith duty by failing to prioritise creditor interests once a company enters the “zone of insolvency”, with the Supreme Court of South Australia confirming that a real risk of insolvency, even short of actual insolvency required under section 588G, can shift directors’ obligations and expose them to earlier and broader liability.

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