UNCITRAL guidance on directors' obligations in the period approaching insolvency

The following Restructuring & Insolvency practice note provides comprehensive and up to date legal information covering:

  • UNCITRAL guidance on directors' obligations in the period approaching insolvency
  • Rationale
  • Objectives and purpose
  • Legislative provisions recommended by UNCITRAL
  • Interpretation
  • English provisions

UNCITRAL guidance on directors' obligations in the period approaching insolvency

Rationale

In the wake of the 2008 credit crunch and the increase in cross-border insolvencies, the United Nations Commission on International Trade Law (UNCITRAL), adopted new guidance to deal with directors' obligations in relation to individual companies pre-insolvency called part four of the Legislative Guide (the Legislative Guide, Part Four). The topic was proposed by the UK, INSOL International and the International Insolvency Institute (III). UNCITRAL's remit is to further the unification of international trade laws and encourage harmonisation, and Part Four was developed in order to further this aim. In particular, a greater degree of harmonisation of national approaches will give greater certainty and predictability for creditors and directors.

The Legislative Guide, Part Four was formally approved by UNCITRAL on 18 July 2013 (see Report of UNCITRAL 46th session A/68/17, para 204). Additional recommendations to deal with the duties of directors appointed to group companies were later added in July 2019 (see Practice Note: UNCITRAL Text on obligations of directors of enterprise group companies in the period approaching insolvency). UNCITRAL recommends that all states across the globe consider the UNCITRAL Legislative Guide when revising or adopting legislation relevant to insolvency. Therefore although the proposals are not automatically binding, they represent best practice.

Although England already has provisions covering many of they key themes, it remains to be

Popular documents