Providing financing to companies in crisis
The provision of finance without collateral, or with insufficient collateral, is considered a breach of fiduciary duty, which constitutes the crime of breach of trust.
However, providing urgently needed finance to a company in a critical state of near-insolvency may not constitute an offence of this kind if such financing could support the company's recovery and prevent the finance provider's existing claims from becoming uncollectable as a result of the company's insolvency. In such circumstances, financing may be provided without security. A Supreme Court ruling offers guidance on the terms on which financing may be available to troubled companies.