A loan had been made by the company to a director. The money had been used to purchase property, and upon the company’s insolvency, the Administrator sought to trace the loan into the property.
Held: Unless there were special circumstances, a loan to a company director by the company was voidable only. Since it remained valid until avoided, no trusteeship arose in respect of the advance, and equitable remedies including tracing could not be used.
Anthony Mann, QC
Times 02-Apr-2002
Companies Act 1985 330 341
England and Wales
Company, Equity
Updated: 06 December 2021; Ref: scu.168113