Study The Duty Of Directors To Creditors On Financial Crisis

The shareholders who were protected by the Limited Liability have incentive to transfer the running cost to others when the company running into financial crisis. At the same time, directors as appointed and dismissed by shareholders also have the ob-ligation to make the company which he worked getting rid of financial crisis as soon as possible. However, the conflict between shareholders、directors and creditors wou-1d be appear in this process, especially the conflict between directors and creditors. As the interest of creditors maybe neglected or harmed by directors. As the result of that, the problem that protected the creditor by law comprehensively became a hot to-pic.The traditional theory acclaims that directors burred fiduciary duty to company or shareholder, not to others. However, whether the directors’fiduciary changed once the company plunges into financial crisis or not, different countries hold different opi-nion. For me, I believe that the directors’fiduciary should be changed once the company plunges into financial crisis, for several reasons. Though analysis, I find two problems. The first one is that the owner of companies’property is creditors not shareholders, when companies running into financial crisis; the second one is that, the creditors are front with the threat of "moral risk" from directors. So, in the modern corporate structure,"the centralism of board directors", a great number of unfair cases would be happen if we don’t require directors burdened direct duty to creditors.Review the China’s law, I found that only the "Securities Law" and the Judicial interpretation of the Supreme People’s Court had embodied the director’s obligation on creditors while corporates in financial crisis. What is more that, the related provisions paid no attention on the different influence company’s financial situation on creditors, and make no different on the directors’obligation."China’s company law" requires the directors to be responsible for the profit of company. As for the relationship between the company and creditors, the law descripted indefinitely. By reasoning, I found that the directors obtained the duty to be loyalty and attentive to ’creditors as the China’s Law required. Directors who don’t finish the obligation will be imposed indirectly. Based on clarifying the related legislation in our country, and different analysis method, I researched the reason base why directors burdened the indirectly obligation to creditors, and the obligation elements、the effect of indirect obligation. At last, I put forward a conclusion:directors’obligation is unless if we imposed the director burdened indirect duty.For the purpose of improving the relevant system, I analyzed the related provision of British、German and Japanese. After that, I hold the opinions that, our company shouldn’t introduce the UK "illegal Trading Rules" to our law system directly, but the related spirit and ideals. I believed that, we can protect the creditors perfectly, if law imposes the director burdened direct obligation to creditors. Following, I tried to establish the directors’obligation to creditors when the company in financial crisis, and analyzed the value orientation、the theoretical basis and the feasible of that. At last of the article, I got a conclusion:there are very suitable for establishing directors’direct duty to creditors when company in financial crisis at present for two reasons. The first one, force directors burdened direct duty is link up our current legal system; the second, the directors’ ability to compensation can be ensured by the liability insurance. Else, establish the directors’direct duty have its rationality of system, as a subset of Civil Liability system.