On The Duties Of Directors To Corporate Creditors

During the period of legislation and enforcement of Corporate Law, how to improve corporate governance and how to deal with the relationship between company directors and creditors of the company in order to improve efficiency, fostering the economic development and lowering the cost of the legal system operating have been the important task of a modern Corporate Law research. This paper elaborates the necessity of directors' duties to creditors,the inevitability,the basic content,law practice of other states and doable solutions in our country. This paper is divided into five parts:The first part explains that the general protection to creditors is not enough according to Corporate Law. Creditors in our country should not take on too much risk. Also Corporate Law cannot give system balance in protecting the interest among the company, shareholders and creditors. Relying on the corporate system, Corporate Law should establish a rational mechanism for the distribution of interest so as to safeguard the legitimate interest of all parties.The second part analyzes the duty theories of directors' duties to creditors. Directors are charged with not only an obligation to the company but also an obligation to the creditors. According to Corporate Social Responsibility Theory, Corporate Interest Equilibrium Theory, Corporate Management Theory, Corporate Finance Theory and Stakeholder Theory, this paper expounds the theoretical foundation of directors' duties to creditors and narrates the inevitability of this kind of obligation. The third part introduces the content of the creditors' duties to directors. The first is duty of care in tort law, in which is restructured by Corporate Law that is brought as a result of indirect infringement and nonfeasance violation. The second is fiduciary duty under company law, divided into direct and indirect fiduciary duty. This part specifies the development process of the duty from its not existing to its being.The fourth part indicates that, comparative analysis of the academic theory and cases of civil Law System and Common Law System, directors' duties to creditors have been developing in the practice of other countries. This part mainly studies the duties of directors' to creditors in Common-law countries and makes a comprehensive exposition to the appearance and development of fiduciary duty.The fifth part demonstrates the system of directors' duties to creditor. Implementation mechanism of creditors' duties to directors must comply with the value orientation of Corporate Law. These provisions about duties and responsibilities of directors to creditors or the third persons should be increased in Corporate Law in our country and we should establish the system of creditors delegate litigation.