Introduction and purpose of section two

• Author: United Nations Commission on International Trade Law
• Pages: 31-32

31

Section two

Obligations of directors of

enterprise group companies

in the period approaching insolvency

Introduction and purpose of section two

1. is section builds upon recommendations 255 to 266 of section one, which

address the obligations of directors of an individual company in the period

approaching insolvency. Focusing on the nature of the obligations and the steps

that might be taken to discharge those obligations (as established in recommen-

dations 255 and 256), this section proposes how those recommendations could

be adapted for application to directors14 in the context of enterprise group.

Recommendations 257 to 266 of section one continue to apply in the enterprise

group context, however cross- references in those recommendations to recom-

mendations 255 and 256 should be read for the purposes of this section as refer-

ences to recommendations 267 and 268 contained in this section.

2. Additional recommendations (recommendations 269 and 270) have been

included in this section to address the situation where a director is appointed to, or

holds a managerial or executive position in, more than one enterprise group member

and a conict arises in discharging the obligations owed to the dierent members.

3. is section should be read in conjunction with section one and also in conjunc-

tion with part three of the Guide. In addition, in 2019, UNCITL adopted a legisla-

tive text, the UNCITL Model Law on Enterprise Group Insolvency,15 which seeks

to facilitate insolvency proceedings for enterprise groups. at text and its accompany-

ing Guide to Enactment provide a framework that is intended to streamline the conduct

of such proceedings and assist in the development of a group insolvency solution,

including by providing a regime for cross-border recognition of group insolvency

 e question of who may be considered a director is discussed in section one, chap. II, paras. 13-16. Although

there is no universally accepted denition of the term, this section continues to refer generally to “directors” for

ease of reference.

 Ocial Records of the General Assembly, Seventy-fourth Session, Supplement No. 17 (A/74/17), annex II.