Insolvency and directors' duties: Country Q&A tool

Search the Country Q&A in the International Insolvency: Group Insolvency and Directors' Duties Global Guide by question and jurisdiction.

Step 1: Check the boxes to select the questions and the jurisdictions for comparison.
Step 2: Click the "submit" button.
Step 3: Scroll down to view answers and check law stated dates for each jurisdiction.

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Corporate insolvency proceedings

1. What are the main out-of-court and court-sanctioned insolvency proceedings involving a liquidation of the company's assets?
2. Are there statutory proceedings allowing for a rescue/restructuring of the debtor company's operations and debts?
3. What are the general requirements for commencing insolvency proceedings?

Insolvency of corporate groups

4. Are there joint insolvency proceedings available that can apply to a whole group of companies?
5. Can the same insolvency office holder(s) administer the assets and the liabilities of the entire corporate group? Is a court hearing required to determine whether administration by the same individual(s) is appropriate and, if yes, does notice have to be given to creditors?
6. If the law does not permit a single insolvency office holder, are there provisions allowing different office holders to co-ordinate with each other so that the value of the group's assets can be maximised?
7. Can professional advisers work for the entire corporate group?
8. Are the rules regarding members of a corporate group transferring assets to one another different when one or more members are insolvent?
9. How are claims of one member of a corporate group against other members of the group treated in formal insolvency processes?

Substantive consolidation

10. Is pooling of assets and liabilities of some or all members of a corporate group allowed?
11. What proceedings are required for the court to order the pooling of assets and liabilities?
12. Is the partial pooling of assets and liabilities allowed? What conditions apply?
13. If the pooling of assets and liabilities is permitted, are there any protections for certain types of creditors?

Secured creditors

14. How are secured creditors treated in relation to a group of companies?

Insolvency proceedings for international corporate groups

15. What extra considerations are necessary if one or more members of the corporate group is incorporated under or governed by the laws of another jurisdiction?
16. If insolvency/restructuring proceedings are started for corporate group members in different countries, do international treaties or EU legislation apply?
17. Do domestic courts typically attempt to exercise jurisdiction over all the assets of a company filing locally (regardless of where the assets are located) or do they limit their jurisdiction to local assets?
18. Do local courts enforce court orders from foreign jurisdictions that attempt to exercise jurisdiction over assets located in your jurisdiction that are owned by a company subject to foreign insolvency proceedings?
19. Can the courts co-operate with foreign courts to co-ordinate the administration of group assets?

Directors' duties

20. Does your jurisdiction encourage or discourage overlapping boards for separate members of a corporate group?
21. What legal consequences are there for the directors of a parent company where they are not directors of the subsidiary but do manage the subsidiary's affairs?
22. What are the main duties and responsibilities of directors and officers to the company, shareholders and third parties? Do they change when the company becomes insolvent?
23. How are competing duties addressed where directors and officers of different group company members overlap and there are conflicts of interest between the group members?
24. What specific types of conduct are in breach of the duties and responsibilities of directors and officers?
25. What civil and criminal liability exists for directors and officers if they breach their duties and responsibilities?
26. Is potential personal civil or criminal liability a factor in officers and directors deciding if and when to put the company into a formal insolvency/reorganisation procedure?
27. Is insurance available to protect directors from claims arising while operating a financially distressed company?
28. Can directors and officers resign from their positions if the company becomes financially distressed and what difference will this make to their potential liability?
29. How common is litigation against directors and officers for violation of their duties after commencement of insolvency/reorganisation proceedings? Is the litigation typically successful?
30. What defences against civil and/or criminal sanctions are available to directors and officers?
31. If it appears that "going concern values" will result in a higher return to creditors than a liquidation of the assets, can directors and officers be protected if they decide to continue operations to protect the values for the benefit of all creditors?
32. If a company becomes insolvent, is a director or officer of the insolvent company legally restricted from acting as a director or officer in another company, or from obtaining credit as a promoter of another company?
33. If a director or officer becomes personally insolvent, is he legally restricted from continuing to act as a director or officer of his current company or another company?
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