Quote:
More than 600,000 Kiwi companies risk losing limited liability protection unless they are more cautious when facing financial difficulty, say the lawyers who acted in a landmark Supreme Court case.
The litigation, which focused on Debut Homes Limited (Debut) and the actions of its director Leonard Cooper, is the first time the country's top court has squarely considered directors' duties.
The Supreme Court found that if a company reaches the point where it is clearly not salvageable and continued trading will result in a shortfall to creditors, directors should immediately close or at least ensure creditors fully understand the risks.
Should be very relevant for the situation CBL was in for months (and possibly for years) ... without telling anybody.