Abstract
Directors' duties have always been a hotly debated topic, none more so than insolvent trading duties. New Zealand's Companies Act 1993 (CA) contains two of these duties, ss 136 (duty not to incur obligations) and 135 (duty not to trade recklessly). The focus of this dissertation is s 135. Section 135 is the more problematic provision, it has been extensively criticised and is New Zealand's most litigated directors' duty. Debate surrounding the provision came to a head with two major recent cases, Debut Homes v Cooper (Debut) and Yan v Mainzeal (Mainzeal). Both cases have made their way to the Supreme Court. Despite the plentiful litigation, s 135 remains as fraught with issues as when it was introduced. The judgments show a divided judiciary, some straying into concerningly draconian territory. The extensive litigation and academic discourse indicate s 135 is deficient and needs reconsideration.