In situations where a company is subject to some form of insolvency process, particularly where there is a Creditors Voluntary Liquidation or Compulsory Liquidation of the company, you may find that the actions of directors are being questioned. The Insolvency Practitioner who is dealing with the affairs of the company has a primary duty to protect the interests of the creditors of the company and the directors often feel that they therefore have no one to turn to for advice.
We offer advice to directors, providing them with an impartial review of their situation and an explanation of the processes involved.
In addition to realising the physical assets of the company, a Liquidator also use the powers available to him in the Companies Act 1985 and Insolvency Act 1986 to review antecedent transactions such as:
Preferences
Wrongful trading
Illegal dividends to shareholders
Misfeasance
If the Liquidator is successful in pursuing an antecedent transaction, the director may in some circumstances be ordered by the court to make payments to the Liquidator out of his personal assets in order to satisfy the claims of the creditors of the company.
In addition, in every insolvent liquidation the Liquidator is required to submit a report to the Department of Trade & Industry Disqualification Unit on the conduct of each of the directors of the company at the date of liquidation and any person that has been a director of the failed company in the three years prior to the liquidation.
Through our experience of dealing with the completion and submission of disqualification returns on directors, we are able to assist directors in providing an independent review of the allegations which have been made against them and advising them on seeking assistance in defending their position. |