Creditors, though, are not regarded as the members of a company, yet the role they play in maintaining a company cannot … virtue of lending money by the creditors to the company, the company becomes debtor to the creditor and hence is under an … obligation to take proper care of the interest of the creditors. Previously, there were no such enactments that provide relief to …

creditors, and analyze the signalling effects of the largecreditor's investment decision on the subsequent behavior of the small …In case of multiple creditors a coordination problem can arise when the borrowingfirm runs into financial distress …. Even if the project's value at maturity is enoughto pay all creditors in full, some creditors may be tempted to foreclose …