Key takeaways for directors

A significant decision of the Supreme Court of the United Kingdom was released last week, BTI 2014 LLC v Sequana SA and others, confirming the existence of a duty owed to the company by its directors to consider the interests of the company's creditors when the company becomes insolvent or approaches insolvency.

As expressed by the Supreme Court, the so-called "creditor duty" reflects a sliding scale:

Lately, the global economic market has been tumultuousMajor changes such as inflation and interest rate hikes may cause individuals or legal entities to fall into the abyss of insolvency. According to the Consumer Debt Clearance Statute and the Bankruptcy Act, if a debtor is unable to repay his/her debts, he/she may clear his/her debts according to the rehabilitation or liquidation process set out by the Consumer Debt ClearanceStatute, or file an application for bankruptcy in accordance with the Bankruptcy Act. Both are procedures to help debtors clear their debts.

In this alert, we review an important UK Supreme Court decision, which confirms that the fiduciary duties of directors to act in good faith in the interests of the company should, where insolvency[1] is imminent or insolvent liquidation or administration is probable, be interpreted as including the interests of its creditors.

近來全球經濟市場瞬息萬變，通貨膨脹、利息調升等重大變動，可能造成個人或法人步入不能清償債務的萬丈深淵。按消費者債務清理條例、破產法之規定，債務人若有不能清償債務之情形時，得依消費者債務清理條例聲請更生、清算，或依破產法聲請破產，二者都是協助債務人清理債務之程序，但從司法案件統計上，准駁情形卻有相當大的差異。

依司法院民國110年統計年報有關「地方法院消債聲請事件終結情形」之統計數字，自101年起至110年止聲請更生事件總計為33,997件，裁准更生之案件總計為24,699件（裁准比率為72.7％）；聲請清算事件總計為9,995件，裁定開始清算之案件總計為7,984件（裁准比率為79.9％）。

然而，有關「地方法院民事破產事件終結情形」同期間之統計數字，聲請破產事件總計僅有2,013件，而宣告破產之案件更只有287件（裁准比率為14.3％）。二者同為清理債務之程序，同樣期待債務人能夠透過債務清理程序重獲新生，何以破產事件不論是案件數量或裁准比率，均大幅低於更生或清算事件？

這些聲請破產之個人或法人，在破產程序中，究竟是因為什麼原因而被法院駁回聲請？或許可以從法院駁回破產聲請的理由，探知我國破產程序何以難如登天。

In previous alerts in this series, we have discussed how transformative DAOs can be for corporate formation and tax status. We have discussed how determining a DAO’s classification—whether a DAO is a legal entity and, if so, what type—is vital before any legal proceeding.

The Privy Council has handed down judgment in two appeals (ETJL v Halabi; ITGL v Fort Trustees [2022] UKPC 36) concerning the nature and scope of the right of a trustee to recover from or be indemnified out of trust assets in respect of liabilities and other expenditure properly incurred by the trustee. A seven-member Board was convened because the Privy Council was asked to reconsider part of its decision in Investec Trust (Guernsey) Ltd v Glenalla Properties Ltd [2019] AC 271.

This week’s TGIF considers a recent case in which the Federal Court of Australia upheld a liquidator’s decision to reject a proof of debt for damages relating to a failed sale of commercial property. 

Key takeaways

New fees are soon to be introduced by The Insolvency Service in respect of the insolvency deposit required to commence a creditor’s bankruptcy petition and winding-up petition which will make it harder for many businesses to collect their debts.

商事合同中通常会订有合同解除条款，比如满足约定条件或情形下，一方得以解除合同的单方解除条款。单方解除条款系商事主体在一定情形下为脱离合同而预先设置的退出机制，它保证了商事主体的意思自治，同时避免了各方受到已无价值的合同关系的拖累。近几年来，受经济大环境的影响，不少商事主体的经营遭遇困难，破产成为企业面临的高概率情形。破产不仅会影响到破产企业本身，亦会影响与破产企业签署商业合同的其他主体，例如，在《企业破产法》（“《破产法》”）第十八条的规定下，前述单方解除权的行使就会受到一定限制。在本文中，我们将提示和阐释该限制，并提出相应的解决方案与风险防范措施。

一、合同约定解除权

一份完整的合同通常会约定合同解除的条款，通常包括双方协商一致解除合同，以及约定条件下一方单方解除合同。关于单方解除合同条款，一般会有类似以下的约定：

“当一方进入破产程序、破产重整、清盘、资不抵债或其它类似的法律程序时，另一方有权立即书面通知对方解除合同。”

Welcome to the eighth edition of our quarterly disputes newsletter, which covers key developments in the dispute resolution world over the last three months or so.