The court considered the possible propriety of a company continuing to trade whilst insolvent: ‘The companies legislation does not impose on directors a statutory duty to ensure that their company does not trade while insolvent; nor does that legislation impose an obligation to ensure that the company does not trade at a loss. Those propositions need only to be stated to be recognised as self-evident. Directors may properly take the view that it is in the interests of the company and of its creditors that, although insolvent, the company should continue to trade out of its difficulties. They may properly take the view that it is in the interests of the company and its creditors that some loss-making trade should be accepted in anticipation of future profitability.’
Judges:
Chadwick LJ
Citations:
[1997] 1 BCLC 341
Jurisdiction:
England and Wales
Cited by:
Cited – The Secretary of State for Trade and Industry v Goldberg, Mcavoy ChD 26-Nov-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 . .
Lists of cited by and citing cases may be incomplete.
Company
Updated: 23 November 2022; Ref: scu.188614