In Foo Kian Beng v OP3 International Pte Ltd (in liquidation) [2024] SGCA 10 (OP3 International)1 the Singapore Court of Appeal considered the trigger for when the director’s duty to consider the interests of creditors is engaged (referred to in the judgment as the Creditor Duty).
The Court held that:
- the Creditor Duty is engaged if the company is imminently likely to be unable to discharge its debts or the company’s insolvency is inevitable at the time of the transaction or as a result of the transaction; and
- a two-step sequential approach should be applied2:
- first the court should objectively examine a company’s solvency at the time the transaction happened; and
- second the court should consider whether the director subjectively…
