In the current economic environment, directors will be fully focussed on avoiding any breach of their fiduciary duties, particularly if they are directors of companies experiencing or at risk of financial distress.
This client briefing provides a general overview of the duties of directors of Guernsey companies in these circumstances and is not comprehensive. We recommend that clients obtain specific legal advice in relation to any individual matter which may concern them.
Who are the Directors?
Introduction
The current geo-political climate is contributing to the rapid rise to inflation rates in many countries around the world. Governments have reacted with an inevitable increase to interest rates to try and offer some form of counterbalance to rising costs in an effort to stymy localised, and more widespread, economic recessions.
Hopefully you have received previous updates from us in relation to the Channel Islands Stock Exchange (CISX) and the proposed restructuring of the CISX.
Guernsey scheme of arrangement
I am pleased to confirm that we now have confirmation that the restructure of the CISX by way of a scheme of arrangement was approved by the Royal Court in Guernsey last Friday.
The recent decision of the English High Court in the case of Fry v Sherry [2012] (In the matter of Ruscoe Ltd (In Liquidation)) serves as a timely reminder of the potential personal liabilities faced by directors should they breach their fiduciary duties.
Summary of the facts