New Director's statutory duty to have regard to the interests of creditors.
On 27 July 2022 the Minister for Enterprise, Trade and Employment introduced by SI a new statutory duty for the directors of Irish companies by inserting a new section 224A into Part 5 of the Companies Act 2014: see Regulation 4 of the European Union (Preventative Restructuring) Regulations 2022, SI 380 of 2022.
The new director's duty is to, have regard to, inter alia, the interests of the company's creditors where a director believes, or has reasonable cause to believe, that the company is, or is likely to be, unable to pay its debts (within the meaning of section 509(3).
The new duty (which is restated in section 228 (so there are now 9 duties set out in section 228(1)) is owed to the company (and the company alone) and section 224A(2) states that it will "be enforceable in the same way as any other fiduciary duty owed to a company by its directors".
The legal basis of this duty is to be found in Article 19 of Directive (EU) 2019/1023 of the European Parliament and of the Council of 20 June 2019.
