Peter Watts KC

Sequana in the Supreme Court: cautious confirmation of the creditor-extension to the director’s duty of loyalty

In this article, Professor Peter Watts KC analyses and critiques the decision of the UK Supreme Court in BTI 2014 LLC v Sequana SA [2022] UKSC 25 (Sequana). This decision confirmed that the directors’ duty to promote the success of their company extends to requiring some consideration of the interests of the general body of the company’s creditors after, but not before, the company becomes insolvent or imminently insolvent. Once a company’s insolvent liquidation or administration becomes inevitable, the interests of creditors become the exclusive focus of the duty of loyalty.