On Directors’ Liability To The Company’s Creditors On The Verge Of Bankruptcy

This paper takes the directors’ responsibility for the creditors on the verge of a company’s bankruptcy. It finds the starting point from the transition of the mechanism of corporate governance, and elaborates the directors’ perverse incentives, such as risk management, intended delay of bankruptcy and waste of assets, which result in impairment of creditors’ rights. Based on the above analysis, the paper draws the conclusion that the directors need to be regulated by law. And this paper analyses the related legal system in different countries by means of comparative research, finally gives legislative proposal to Chinese Legislation by analyzing the Chinese legislation and judicial practiceThe full text consists of text and introduction.The text can be divided into four parts:The first section provides an overview of the reasons that directors liable to creditors when the company is on the verge of bankruptcy when the company. Specific include: the board of directors center doctrine, the directors of improper motivation, in this period, resulting in the abuse of limited liability of the stakeholder theory and creditor status due to their lack of protection of interest.The second part is the focus of this article. This part compares the provisions of the relevant case law and statutory law in Germany, the United Kingdom and the United States. Germany has adopted the "board of directors filed for bankruptcy obligation" mode, adopting the statute law in Britain is "wrongful trading", "fraudulent" and "enlightened shareholder value" and other terms. Based on the company’s fiduciary duties of directors, British case law requires companies to consider the interests of creditors when the company is in the verge of bankruptcy. In direct obligations of directors rejected the creditors on the basis of case law the United States proposed a "creditor derivative litigation." The second chapter also compares the responsibility of nature, the main constituent elements and litigation.The third part is the analysis the lack of our country on this issue from two aspects of the current status of legislation and judicial practice in china. The problem is there are no legal constraints and no legal induced situation. And explains the company on the verge of bankruptcy trustee when adventure management, unreasonable expanding corporate debt caused so that the bankruptcy liquidation creditors of the low rate of facts through the case.The fourth part proposed our country to establish the system of the liability of directors to creditors.