Application for contribution from directors after they had traded beyond the time when any prospect of avoiding insolvent liquidation was lost. Judges: The Honourable Mr Justice Peter Smith Citations: [2006] EWHC 5803 (Ch) Links: Bailii Statutes: Insolvency Act 1986 214 Jurisdiction: England and Wales Insolvency, Company Updated: 29 September 2022; Ref: scu.241457
Citations: [2009] EWHC 1632 (Ch), [2010] BCC 143 Links: Bailii Statutes: Insolvency Act 1986 214 Jurisdiction: England and Wales Insolvency Updated: 19 August 2022; Ref: scu.416198
Insolvent trading Citations: [2004] EWHC 316 (Ch) Links: Bailii Statutes: Insolvency Act 1986 214 Jurisdiction: England and Wales Insolvency, Company Updated: 10 June 2022; Ref: scu.194153
It is difficult to envisage any developed system of corporate law which does not impose some obligation on directors to consider whether the company is solvent and, if not, to consider what should be done about it. Chadwick J said: ‘I accept that when deciding whether or not to make a declaration under s.214 of … Continue reading Re Howard Holdings Inc: ChD 1998
Action by Liquidator against directors for wrongful trading. The court was asked Whether the liquidators had established continued trading causing a loss to company in order to attribute personal liability on the directors. Held: Section 214(3) was intended to impose a high hurdle on the directors, being construed strictly it would require a director seeking … Continue reading Grant and Another v Ralls and Others (Re Ralls Builders Ltd): ChD 11 Feb 2016
ET plc wholly owned MCP Ltd which wholly owned Landsaver MCP Limited, which wholly owned Hydrodam (Corby) Limited (‘HCL’). The only de jure directors of HCL were two Channel Island companies. HCL went into compulsory liquidation and its liquidator brought claims under section 214 of the 1986 Act for wrongful trading against 14 defendants, including … Continue reading In re Hydrodam (Corby) Limited: ChD 1994
The limitation period for an action for wrongful trading under insolvency legislation is six years. Where the statute relied upon enables the court to give relief in monetary or non-monetary form the court should look to see what is actually claimed . .
Judges: Chadwick, Laws, Jonathan Parker LJJ Citations: [2005] EWCA Civ 247, [2005] CP Rep 33, [2006] 1 WLR 2194, [2005] 3 Costs LR 363, [2005] BPIR 454, [2005] 1 All ER 272 Links: Bailii Statutes: Insolvency Act 1986 213 214 Jurisdiction: England and Wales Company, Insolvency Updated: 12 December 2022; Ref: scu.223683
The Revenue sought the defendant’s liquidation, challenging the sum fixed to be due by the chairman of the meeting and the football rules which gave preference to football debts over those of others. The dispute was as to treament of receipts for players’ image and associated rights. They were paid into discretionary trust funds, and … Continue reading HMRC v Portsmouth City Football Club Ltd and Others: ChD 5 Aug 2010
Liquidators of the company brought proceedings alleging fraudulent trading and trading whilst insolvent by its former directors. An application was made for an in-time application for an extension of time for disclosure. Held: The Court should scrutinise an application for extension more rigorously than before the Jackson reforms and must firmly discourage any easy assumption … Continue reading Atrium Traing Services Ltd; Smailes and Another v McNally and Others: ChD 27 Sep 2013
The claimant sought damages against its former directors for negligence and breach of fiduciary duty. The defendants asked that the claims be struck out. Held: It was no longer good law that directors might leave the conduct of the company’s business to competent management. Though section 727 might give relief to directors who had been … Continue reading Equitable Life Assurance Society v Bowley and others: ComC 17 Oct 2003
The Secretary of State sought a disqualification order. The director argued that one shoul not be made in the absence of some breach of legal duty, some dishonesty should be shown. Held: The answer was a mixture of fact and law. A breach of duty alone was neither necessary nor sufficient. Unfitness by reason of … Continue reading The Secretary of State for Trade and Industry v Goldberg, Mcavoy: ChD 26 Nov 2003
Parties said that assets of the insolvent company were held by it in trust for them. Held: The court had no jurisdiction to sanction a scheme of arrangement proposed by the administrators between the company and former clients who had proprietary interests in the assets held by the company or on its behalf. Judges: Blackburne … Continue reading Lehman Brothers International (Europe) (No 2), Re: ChD 21 Aug 2009
The Court was asked as to the validity of the assignment by a liquidator to a litigation funder of the benefit of a wrongful trading claim against the directors of the company under section 214 of the IA 1986. The directors sought to stay the claim on the basis that the liquidator had no power … Continue reading Ward v Aitken and Others; In re Oasis Merchandising Services Ltd: CA 9 Oct 1996
An agreement to share the proceeds of litigation against Directors was champertous. Citations: Times 19-Jun-1995 Statutes: Insolvency Act 1986 S4P6 Jurisdiction: England and Wales Cited by: Appeal from – Ward v Aitken and Others; In re Oasis Merchandising Services Ltd CA 9-Oct-1996 The Court was asked as to the validity of the assignment by a … Continue reading Ward v Aitken and Others; In re Oasis Merchandising Services Ltd: ChD 19 Jun 1995
When a defendant was accused of an offence under the section, and wished to raise a defence under sub-section 4, the duty of proof placed on him by the sub-section amounted to a duty to bring sufficient evidence to raise the defence, and the section did not transfer the burden from the prosecution. Held: To … Continue reading Regina v Clive Louden Carass: CACD 19 Dec 2001
The court described the roles of a director of a company: ‘ . . the duty of care owed by a director at common law is accurately stated in sec. 214(4) of the Insolvency Act 1986. It is the conduct of: a reasonably diligent person having both- (a) the general knowledge, skill and experience that … Continue reading Re D’ Jan of London Limited: 1993
Citations: [2018] EWHC 2141 (Ch) Links: Bailii Statutes: Insolvency Act 1986 304 Jurisdiction: England and Wales Insolvency Updated: 26 April 2022; Ref: scu.621142
The noter sought an order under section 214A of the 1986 Act for recovery of sums withdrawn by the respondent from the LLP in the two year period before the granting of the winding up order. Citations: [2018] ScotCS CSOH – 23 Links: Bailii Statutes: Insolvency Act 1986 214A Jurisdiction: Scotland Insolvency Updated: 14 April … Continue reading Milne, Liquidator of Premier Housewares (Scotland) Llp v Rashid: SCS 14 Mar 2018
Judges: Mr Justice Etherton Citations: [2004] EWHC 316 (Ch) Statutes: Insolvency Act 1986 1214, Companies Act 1985 212 Jurisdiction: England and Wales Insolvency, Company Updated: 12 April 2022; Ref: scu.194074
The Secretary sought disqualification of the defendants. The second defendant had not been a director of the company, but director of another company which in turn held a directorship in the defaulting company. Held: The claim failed: ‘i) As I have already pointed out the purposes of section 6 of the CDDA and section 214 … Continue reading Secretary of State for Trade and Industry v Hall and Nuttall: ChD 28 Jul 2006
Directors liability to compensate on insolvency for own negligence. ‘In my view, the duty of care owed by a director at common law is accurately stated in s 214(4) of the Insolvency Act 1986. It is the conduct of – ‘a reasonably diligent person . .