Directors' Duties: The Next Chapter

Following the UK Supreme Court decision in Sequana¹ at the end of 2022, the New Zealand Supreme Court has now weighed in on the issue of the duties owed by directors of a company in the zone of insolvency in a long-running case involving the liquidation estate of Mainzeal Property and Construction Limited.²

As directors around the world grapple with difficult and uncertain times arising from various macro-economic factors, these decisions provide useful and timely guidance on the approach that directors should take to protect themselves and the companies they manage.

This may mean taking advice in relation to ceasing to trade, trying to enter into restructuring support agreements or appointing officeholders to assist. In the Cayman Islands, the new restructuring officer regime provides a helpful framework to provide breathing space for directors to facilitate and implement a viable plan in appropriate circumstances.