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ARTICLE · 22 FEBRUARY 2023

Directors' Duties To Consider Creditors – Navigating Recent Developments

Matheson
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The Irish courts have long recognised the principle that directors of companies that are insolvent must have regard to the interests of the creditors of the company as a matter of Common Law.

IrelandCorporate/Commercial Law
Brendan Colgan
Brendan Colgan
Kevin Gahan
Kevin Gahan
Julie Murphy-O'Connor
Julie Murphy-O'Connor
Tony O'Grady
Tony O'Grady
Irene Lynch Fannon
Irene Lynch Fannon
Róisín Peart
Róisín Peart
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The Irish courts have long recognised the principle that directors of companies that are insolvent must have regard to the interests of the creditors of the company as a matter of Common Law.

The European Union (Preventive Restructuring) RegulationsOpens in new window 2022 (the "Regulations"), which were signed into law last year, have reinforced and refined this principle in certain respects.

The Regulations have, amongst other things, inserted a new section 224A into the Companies Act 2014 (the "Act")1, which provides that a director who believes, or has reasonable cause to believe that a company is, or is likely to be unable to pay its debts2, must have regard to:

(a) the interests of the creditors;3

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