Does Canadian Law Adequately Protect Creditors of Financially Distressed Corporations?

Chioma Adiele
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Abstract

There is no direct duty owed by directors who are the human agents of corporations to creditors as this duty is owed to the corporation alone. The courts have recognized that a duty of care may be owed to creditors. However, the scope of this duty of care is limited due to the broad interpretation the Canadian courts have accorded the business judgment rule. This makes it difficult or almost impossible for creditors to challenge the acts of directors so long as the directors claim to have acted reasonably and in the best interest of the corporation. This paper argues that although the courts have attempted to establish a broad and flexible principle to accommodate creditors, the principles are either too vague or insufficient to adequately protect creditors of financially distressed corporations.
加拿大法律是否充分保护陷入财务困境的公司债权人?
作为公司的人类代理人的董事对债权人没有直接的义务,因为这种义务只对公司负有。法院承认对债权人可能负有注意义务。然而,由于加拿大法院对商业判断规则的广泛解释,这一注意义务的范围是有限的。这使得债权人很难或几乎不可能挑战董事的行为,只要董事声称自己的行为是合理的,符合公司的最大利益。本文认为,尽管法院试图建立一个广泛而灵活的原则来容纳债权人,但这些原则要么过于模糊,要么不足以充分保护财务困境公司的债权人。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
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