Creditor's protection in the crisis and directos's duties in the vicinity of insolvency in Germany and in the Usa

Abstract

This article analyses how two law systems which are central in many studies of comparative law – Germany and the USA – deal with the subject of the director’s duties and liabilities in the moment of the company’s financial distress. In this moment, the main concern is related to the protection of creditors instead of the welfare of the shareholders, whose shareholding, as a result of the squandering of the company’s assets, has only little importance. In this sense, the actions of the directors concern, in a general view, the protection of the remaining assets. However, regulation strategies and techniques vary considerably in both systems. Germany privileges the protection of creditors by way of the attribution of express duties to directors related to the filing of insolvency procedures in the proper moment and consequent liability if they do not act so. Thus, the focus lies on the protection of the remaining assets. American law, on the other side, focuses clearly on the recovery of the company, by granting liberty of action to the directors and by restraining the court’s analysis of entrepreneurial decisions.