The Corporations Law, section 588G imposes a duty on company directors to prevent insolvent trading. To this extent directors can be subjected to personal liability for corporate debts. This is the result of a long and complex statutory development. Even more complex is the question under the caselaw of when directors can be made personally liable for damages for corporate torts, including breach of statutory duty. Recently there has been a number of Australian cases dealing with such matters but unfortunately there has been a division of judicial opinion on the basic tests and a lack of clear analysis of the fundamental questions of principle and policy underlying them. The purpose of this article will be to attempt a preliminary analysis.