Sequana’s subsidiary was liable to indemnify BTI for costs arising from the clean-up of a polluted river. The directors of the subsidiary resolved that it should pay a substantial dividend to Sequana, without – BTI says – leaving enough money in the subsidiary to pay for the clean-up costs. The Court was asked whether the trigger for the directors’ duty to consider creditors is merely a real risk of, as opposed to a probability of, or close proximity to, insolvency.
Held: BTI’s appeal failed.
Judges:
Lord Reed, Lord Hodge, Lord Briggs, Lady Arden, Lord Kitchin
Citations:
[2022] UKSC 25, [2019] Bus LR 2178, UKSC 2019/0046, [2022] 3 WLR 709, [2022] Bus LR 920
Links:
Bailii, Bailii, Bailii Press Summary, Bailii Issues and Facts, WLRD, SC 21 May 04 am Video, SC 21 May 04 pm Video, SC 05 May 21 am Video, SC 05 May 21 pm Video, SC, SC Summary, National Archive, SC Summary Video, Bailii Press Summary, Bailii Issues and Facts
Jurisdiction:
England and Wales
Citing:
Appeal from – BTI 2014 Llc v Sequana SA and Others CA 6-Feb-2019
The Court considered a Director’s duty to act in the interests of his company’s creditors. The Directors were said to have paid out an excessive dividend to put assets beyond the reach of its creditors. . .
Cited – West Mercia Safetywear Ltd v Dodds CA 1988
If a company continues to trade whilst insolvent but in the expectation that it would return to profitability, it should be regarded as trading not for the benefit of the shareholders, but for the creditors also. If there is a possibility of . .
Lists of cited by and citing cases may be incomplete.
Company, Insolvency, Insolvency
Updated: 07 December 2022; Ref: scu.681435