New insolvency law takes effect and exposes directors to personal liability

The new Israeli insolvency act went into effect on sunday, 15/9/19, and dramatically changed the state of affairs related to the personal liability of directors for the state of the companies under their command. Many were not aware of the fact that under article 288 of the law personal liability may be placed on directors for insolvent companies, in case said managers were supposed to be aware of the company’s state (even if they were not aware in actuality) and did not take appropriate measures to prevent or reduce the company’s insolvency exposure.

In an article published in Israeli, Hebrew written, magazine – Globes, Prop David Han details the various consequences and ramifications of the new law for director liability, minimum awareness threshold, rules of business decision making – as well as the means and tools which enable directors to retain their liability protection under the limited liability status of the firm.

Share on facebook
Share on twitter
Share on linkedin

Subscribe to our newsletter
For news updates