UK decision may influence Canadian directors’ fiduciary duty regarding creditors

BTI may help courts decide whether directors properly considered creditors, Preet Gill says.

By Julius Melnitzer | November 19, 2022

Although the landmark decision of The Supreme Court of the United Kingdom in BTI 2014 LLC v. Sequana SA appears to fly in the face of Canadian law, directors may still feel its impact on the exercise of their fiduciary duty as it relates to creditors.

“Canadian law is very clear that there is no point at which directors can disregard the best interests of the company as a whole in favour of creditors, but BTI says this can happen when a company faces ‘imminent insolvency,’” says Preet Gill, a complex legal issues and opinions partner who focuses on debt restructurings in Bennett Jones LLP’s Toronto office. MORE . . .

Julius Melnitzer is a Toronto-based legal affairs writer, ghostwriter, writing coach and media trainer. Readers can reach him at julius@legalwriter.net or https://legalwriter.net/contact.

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1 Comment

  1. Just a further thought on the BTI judgment, if I may.

    While directors of Canadian corporations may or may not ultimately feel the impact of the BTI judgment on the exercise of their fiduciary duty as it relates to creditors, given the interconnected commercial world in which their corporations often operate, and the importance in that world of English law, their corporations will be impacted by the judgment.

    Barry

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