The bank or steering committee may wish to appoint director’s to the lender, monitor the position.\u00a0 There is a risk that the appointee may be deemed a shadow director.\u00a0 This is a person who was neither formally appointed nor necessarily held out as a director.\u00a0 However, they may be treated as a director for the purpose of certain personal sanction.\u00a0 Shadow directors may be subject to liability for fraudulent or reckless trading.\u00a0 He may be restricted or disqualified as a director.<\/p>\n
The initial phases of the restructure are unlikely to involve the bank or a syndicate as a shadow director.\u00a0 However, ongoing monitoring conditions lead to the risk that the bank or some of its officers or employees may be shadow directors.<\/p>\n
If for example, the bank has control over operational matters and imposes requirements that affect operational matters, a signatory to bank accounts and can veto key decisions, it might be deemed to be a shadow director.<\/p>\n
It is desirable that the company is independently advised and the directors continue to act in the best interest of the company albeit in straightened circumstances. It is desirable to keep the detailed minutes showing the propriety of decisions.<\/p>\n\n
\n <\/div>\n\n","protected":false},"excerpt":{"rendered":"
Insolvency Context The alternatives to a workout may be liquidation, receivership or examinership.\u00a0 If a lender has a debenture over all assets, it may be in a position to secure control over the entire undertaking. Examinership gives a period in which to formulate a proposal for the survival of a business.\u00a0 The rights of creditors […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[53],"tags":[],"_links":{"self":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/648"}],"collection":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/comments?post=648"}],"version-history":[{"count":1,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/648\/revisions"}],"predecessor-version":[{"id":649,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/posts\/648\/revisions\/649"}],"wp:attachment":[{"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/media?parent=648"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/categories?post=648"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/legalblog.ie\/wp-json\/wp\/v2\/tags?post=648"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}