Fiduciary Duties Of Directors To Creditors On The Verge Of Bankruptcy

In the traditional company law theory,the directors are the company's managers and just undertake fiduciary obligations to the company and the shareholders,and there is no direct legal relationship with the creditors.So directors have no obligations to the creditors.With the separation of ownership from management in modern company,the structure of corporate governance has been changed.And board centralism replaces shareholder centralism.The board of directors has the absolute right to management.With the expansion of directors' power,countries began to limit their overexpansion by establishing a system of directors' liability.Corporate creditors are often at a disadvantage when the company is on the verge of bankruptcy.And their rights and interests are not guaranteed.This article is based on the obligation of the directors to the creditor,and the legitimacy and content of the obligation of fiduciary duty to the creditor.And the responsibility of the director to violate the obligations of the creditor.This paper is divided into three parts.The first part research why directors should bear the legitimacy of the obligation of fiduciary duty to the creditor.The first part of the research director should bear the legitimacy of the obligation of fiduciary duty to the creditor.First of all,according to the trust theory,the directors,as the trustee of the company and shareholders,bear the fiduciary duty to the company,and the beneficiaries of the fiduciary duty rules of directors belongs to the shareholders.When the company is on the verge of bankruptcy,the remaining assets of the company are actually the trust fund of the creditors,and the actual beneficiary of the company's interests begins to be converted into the interests of the company's creditors.At this time,the directors of the company shall be responsible to the creditors.Secondly,when the company is operating normally,the company's operational risk is first assumed by the shareholders.Therefore,the company should first consider the interests of its shareholders when making business decisions.However,when the company is on the verge of bankruptcy,the remaining assets of the company are owned by the creditors.At this time,the risk of the company will ultimately be borne by the creditors,so the directors should fully consider the interests of creditors.In the end,the company is actually a community of interests composed of multiple subjects.When the company is on the verge of bankruptcy,the business decision behavior of the directors should fully consider the interests of creditors in order to balance the interests of all parties and assume corporate social responsibility.In addition,the director has practical significance for the creditor to bear the fiduciary duty,and the most direct significance is to protect the company's creditors and clarify the responsibility.At the same time,under the background of a large number of zombie enterprises,it is possible to disclose the real situation of the company as soon as possible by determining the obligations of the directors to the creditors when the company is on the verge of bankruptcy,and put forward the bankruptcy application,minimize the losses of the creditors,minimize the harm to the social economy and prevent the social and economic risks.The second part studies the content of the directors' commitment to the creditor.The content of fiduciary duty includes duty of loyalty and duty of care.The duty of loyalty is mainly that the director should be in the interest of the creditor and not seek personal gain to harm the interests of the creditor.The duty of attention mainly includes the bankruptcy application obligation and the business decision care obligation.The third part of the study is a violation of the obligation of the creditor to the creditor.If directors violate the liability of the creditor's fiduciary duty,they shall take the imputation principle and assume civil liability to the creditor when the director has intentional or gross negligence.On the litigation mechanism,creditors not through derivative litigation,but can be directly lawsuit against directors.The director's liability to the creditor is damages,which is a supplementary liability.On the civil liability of the board in violation of the obligation of the creditor,we can introduce a business judgment rule on the liability of the board.