Publication Type
Case note/Digest
Publication
Singapore Law Journal (Lexicon)
Publication Date
9-2025
Abstract
In Foo Kian Beng v OP3 International Pte Ltd (in liquidation) [2024] 1 SLR 361, the Singapore Court of Appeal introduced a two-step, three-category framework for evaluating whether a director has breached his fiduciary duty to consider the interests of creditors. This decision not only affirms the traditional understanding of the duty in other common law jurisdictions but also provides directors with clearer guidance on managing the affairs of the company in times of financial distress. This article builds upon the discussion in Foo Kian Beng by evaluating the new framework established by the SGCA. It also identifies potential challenges that may arise in applying the framework, namely (a) the valuation of contingent assets and liabilities, (b) the appropriate test for insolvency, and (c) the relevance of the statutory insolvency regime.
Keywords
directors’ duties, fiduciary duty, creditors’ interests, insolvency, Singapore Court of Appeal, corporate governance, financial distress, company law, contingent liabilities, statutory insolvency regime
Disciplines
Bankruptcy Law | Business Organizations Law | Commercial Law
Subject(s)
Applied or Integration/Application Scholarship
ISSN/ISBN
2737-5048
Publisher
SMU Lexicon, SMU School of Law
Version
publishedVersion
Copyright Holder
Singapore Management University
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Format
application/PDF
Citation
CHEONG, Jonathan Ren Hao.
The new framework for directors’ duty to creditors and the challenges ahead – Foo Kian Beng v OP3 International Pte Ltd (in liquidation) [2024] 1 SLR 361. (2025). Singapore Law Journal (Lexicon). 5, 128-152.
Available at: https://ink.library.smu.edu.sg/sljlexicon/51
Volume
5
Page
128-152