The COVID-19 pandemic has placed immense strain across the whole of the economy and raises the issue of how company directors should balance their obligations to shareholders and creditors while ensuring that they protect themselves from any personal liability.

Companies and their directors in the following sectors of the economy face difficult decisions:

The recent decision of the London Commercial Court in PJSC Tatneft v Gennady Bogolyubov & Ors [2018] EWHC 1314 (Comm) highlights the importance that the Court will attach to full asset disclosure by a respondent to ensure the effectiveness of a freezing order, even in circumstances where the value of a respondent’s assets exceeds the sum frozen by the order.

Freezing Orders: What Are They?

In Berryman v Zurich Australia Ltd [2016] WASC 196 it was decided that a bankrupt's entitlement to claim a TPD benefit under a life insurance policy is not an entitlement that is divisible amongst the bankrupt's creditors, and therefore such an entitlement does not vest in the Official Trustee in bankruptcy. Tottle J of the Supreme Court of Western Australia ruled that the bankrupt insured could continue an action in his own name to recover the TPD benefit. Life insurers may need to adjust their claims' payment practices in light of the Berryman decision.