BTI V Sequana: Creditor-oriented duties in company law

On 5 October the UK Supreme Court decided the case in BTI v Sequana. The case decides a fundamental question of company law. It provided the first opportunity for the Supreme Court to consider the existence, content and engagement of the so-called “creditor duty”, which is also known as the “rule in West Mercia” after the leading case of West Mercia Safetywear v Dodd.

The Supreme Court confirmed that the duty exists and held that the duty exists where the company is the company is insolvent, or bordering on insolvency, but is not faced with an inevitable insolvent liquidation or administration. At this point the directors should consider the interests of creditors, balancing them against the interests of shareholders where they may conflict. The greater the company’s financial difficulties, the more the directors should prioritise the interests of creditors.

LSE Law is delighted to host an event with a panel of eminent speakers who will discuss the case and its implications for company and insolvency law.

Andrew Thompson KC represented BTI in the Supreme Court

Leslie Kosmin KC decided a similar case as a Deputy Judge in Colin Gwyer v London Warf

Sarah Paterson is a professor at LSE Law specialising in insolvency law

Mary Stokes is a visiting professor (in practice) at LSE Law

The event will be chaired by Eva Micheler, who is a professor at LSE Law specialising in company law.