The Impact of Emerging Preventive Restructuring Mechanisms on Directors’ Duties to Creditors in the Event of (Pre-)Insolvency in the UK and the Netherlands

Abstract

Jurisdictions around the world are adjusting their insolvency laws with the aim to offer debtors in financial difficulties instruments that enable them to bring the company to a healthy state as soon as the problems arise. The rationale is that viable companies should have access to procedures that permit them to continue business, in whole or in part, by changing their capital structure as well as carrying out operational changes. Directors’ duties to creditors form a regular part of the laws concerning insolvency and therefore, a change in the insolvency laws will, arguably, have consequences for directors’ duties. In this paper, the impact of new preventive restructuring tools in the Netherlands and the UK on directors’ duties is discussed.