Company directors should be aware that the consequences of business malpractice can be visited on their heirs after their deaths. However, in one case, the estate of a deceased nightclub boss has defeated claims that he fraudulently misappropriated its takings to fund his high-spending lifestyle and other business interests.
The businessman’s estate faced High Court claims that he had dishonestly diverted money from the company which ran the club in breach of his duties as a director. The company, which had since fallen into liquidation, alleged that he had misused large sums from the club’s takings to support his other businesses and to fund his own and his family’s personal expenditure.
In dismissing the company’s case, however, the Court found that those allegations had not been proved on the evidence. The proceedings had in any event been brought too late and the substance of the company’s claims had been settled by agreement more than five years before the businessman’s death.