Source: All England Reporter
Publisher Citation: [2016] All ER (D) 117 (Nov)
Neutral Citation: [2016] EWHC 2893 (Ch)
Court: Chancery Division

David Foxton QC sitting as a Deputy Judge of the Chancery Division

Representation James Couser (instructed by Nelsons) for the liquidators.
  Tiran Nersessian (instructed by Ashton Bond Gigg) for the directors.
Judgment Dates: 15 November 2016


Liquidation - Voluntary winding up - Creditors' voluntary winding up - Company's liquidators bringing claim, alleging defendant directors liable to pay compensation on ground of knowledge, at certain date, that no reasonable prospect of company avoiding insolvent liquidation and that in breach of duties - Registrar rejecting liquidators' case that requisite knowledge of directors having been established on certain date, but holding knowledge established at later date(s) - Registrar finding directors jointly and severally liable for breach of directors' duties and ordering directors to pay compensation in sum amounting to 50% of figure arrived at - Liquidators appealing and directors cross-appealing - Whether registrar erring in calculation of, and approach to, compensation - Whether registrar erring in respect of defence of minimising loss - Whether appeals should be allowed - , .

The Case

Liquidation Voluntary winding up. The Chancery Division allowed, in part, a cross-appeal by the directors of a company in creditors' voluntary liquidation against an order that they were jointly and severally liable to pay compensation of 35,000 for wrongful trading in respect of a company in liquidation. The directors had argued that the process by which the registrar had calculated the compensation payable by them had been unfair. The court held that the liquidators had failed, in the earlier proceedings, to advance and establish a properly formulated case that there had been any increase in net deficiency of the company during the period of wrongful trading, and that, on the approach adopted and facts found by the registrar, there had been no such increase. Accordingly, it held that the registrar should not have ordered any payment by the directors to the liquidators, under s214(a) of the .

Practice Areas

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