Which of the following statements is true regarding the impact of wrongful trading?

In the context of wrongful trading, the statement that creditors can sue directors personally is indeed accurate. Wrongful trading occurs when a company continues to trade while insolvent, and the directors do not take steps to minimize losses to creditors. If the company is later found to be insolvent, directors may be held personally liable for the debts incurred during the period of wrongful trading.

This personal liability arises because the directors are expected to act in the best interests of creditors when they are aware that the company is potentially insolvent. Creditors have the right to seek redress against directors for any losses sustained due to their failure to act responsibly and mitigate the continued trading of the company.

The other options are based on misconceptions. For example, due diligence by directors does not absolve them from liability if the company was trading while insolvent; wrongful trading specifically shows that regardless of their due diligence, they did not uphold their duty to creditors in an insolvent scenario.

Moreover, wrongful trading actions can be initiated by creditors, not just the government, making the second statement the most appropriate choice. Finally, wrongful trading can occur in any insolvent company, not only fraudulent ones, highlighting the necessity for directors to be keenly aware of their company's financial status and their