Should the director's obligation to consider creditor interests when companies are insolvent be wider and include other stakeholders?

In many common law jurisdictions, directors are subject to an obligation to consider the interests of their companies’ creditors when companies are insolvent or close to insolvency. This obligation is part of the directors’ duty to act in the best interests of their company and is not a standalone duty. Much has been written about this obligation, but this article addresses an issue that has not been previously broached. It investigates whether the interests of stakeholders other than creditors should also be taken into account when a company is insolvent but has not entered some formal insolvency regime, such as liquidation. Hitherto, the literature has examined whether the interests of stakeholders in general should be considered by directors along with those of shareholders in solvent companies. After explaining the main elements of the obligation to creditors, this article examines the rights many say stakeholders should have in companies and then considers whether stakeholders should be entitled to have their interests considered by directors when a company is insolvent. Finally, the paper identifies and analyses the problems that exist with requiring consideration of the interests of stakeholders and examines some of the options that could be employed to address these problems.