It has long been established that company directors come under a duty to take creditors’ interests into consideration when their company is in ﬁnancial difﬁculty or enters what is commonly referred to as the “zone of insolvency”. The recognition of this duty arose as early as 1976 in the Australian case of Walker v Wimborne and was subsequently adopted by a number of common law jurisdictions throughout the 1980s. The duty has been recognized in the Cayman Islands since at least Justice Harre’s 1990 decision in Prospect Properties Limited (in liquidation) and McNeill and Bodden and now forms a central part of the Cayman jurisprudence on directors’ duties.
Download the pdf to read more. This article was first published in the January/February 2020 edition of Asian Legal Business.