Duties and liabilities of directors of bankrupt companies with particular reference to personal liability for corporate debts

Abstract

The Law of Bankruptcy may be defined as a mass of juridical principles which govern proceedings of competition in connection with the bankruptcy of debtors, in order that the assets of such debtors be managed and liquidated for the benefit of the creditors. Therefore it may be safely stated that Bankruptcy Law regulates collective proceedings in order to attain the "par codictio creditorum". Furthermore, Bankruptcy law also protects the interests of the debtor himself. Thus, in a bankruptcy situation the debtor is not faced by a multiplicity of actions, but instead collective proceedings are brought against the curator. Through the bankruptcy procedure the debtor may be discharged of his former debts and rehabilitated to trade. Bankruptcy Law also serves to protect the interests of the public in general. It is certainly in the public interest that when there is a breakdown in credit, such default is remedied as expediently as possible through procedures which are efficiently regulated and which are conducted openly. The procedure which the legislator laid down in the provisions relating to bankruptcy, does try to safeguard the public inte rest by ensuring that due publicity is given to the procedures and that the case in question is resolved as equitably and efficiently as possible.