The Board Of Directors Responsibility Of The Bankrupt Enterprise

Director liability for the insolvency is the extension of the duty imposed upon directors stipulated in the insolvency Law and the Company Law. On one hand, it is a direct product as the result of the ideological trend which holds that the creditor's interest be protected more strongly, and on the other hand, it also meets the need of strengthening the external supervision and improving the company's management. Where the civil liability is traced back to directors who are personally responsible for the insolvency of insolvent companies, a higher standard of good faith and diligence duty shall be imposed upon the directors which is expected to propel the directors to perform powers and functions much more diligently and loyally, whereby the creditors' interests is blessed with stronger legal protection and the corporate governance is expected to be improved.The key issue under discussion is raised in the first chapter. Firstly, the author defines the concept of relevant concepts. Then, makes a general description of the current situation where the insolvency of enterprises is worsened due to the directors' behavior and enumerates various kinds of typical cases occurring in real life, which seriously impair the rights and interests of creditors, investors and other stakeholders. How to curb and mitigate the graveness with which the directors misuse the insolvency mechanism in a mal fide way increasingly becomes the urgent problem need to be resolved. Also, in this chapter, the author makes a brief and superficial analysis of the above-mentioned phenomena and catalogues two kinds of circumstances: the insolvency caused by the directors under normal conditions and directors incurred debt where the enterprises have fallen into insolvency situation. The liability of the directors for the insolvency refers to the latter one.In chapter two the author dictates the theoretical ground upon which the directors liability is based, systematizes and compares the institutions of different countries, finally comes to the conclusion. As far as the theoretical ground study is concerned, the author mainly discusses the creditor's protection theory and corporate governance theory followed by the general introduction of the directors' liability in the England, Australia and other major countries with the England relevant provisions being the...