Introduction

In a recent article we considered the nature and extent of directors’ duties to take into account the interests of a company’s creditors when a company is in financial difficulty. A recent High Court decision (Mitchell & Krys v Al Jaber & ors [2023] EWHC 364 (Ch)) considered the issue of directors’ duties in the subsequent situation where a company has entered liquidation. Whilst the relevant company was based in the British Virgin Islands (BVI), the case includes analysis of the position in English law.

Introduction:

On 5 October 2022, the Supreme Court delivered a landmark judgement in BTI 2014 LLC v Sequana SA [2022]. The decision is the first from the Supreme Court to address when, and in what circumstances, company directors owe a duty to consider the interests of the company’s creditors (‘’the creditor duty’’).

The Supreme Court yesterday ruled that client money held in un-segregated accounts should be treated the same as client money held in segregated accounts, enabling un-segregated account holders to share in the client money pool on the insolvency of a firm with whom the account is held.