For many businesses, the COVID-19 pandemic represents an existential crisis and their creditors face an unenviable choice between accepting a stern financial haircut or taking their chances in an insolvency. As a High Court case showed, however, judges have been working hard to ensure that
Personally guaranteeing repayment of a company’s debts should not be undertaken lightly or without professional advice as it effectively removes you from the shelter of the corporate veil. In a case on point, a prominent businessman who entered into such a guarantee ended up bankrupt
Many companies are struggling to survive amidst the COVID-19 pandemic but, so far as judges are concerned, it is a case of all hands to the pump to save what can be saved. In one case, the High Court paved the way for the proposed
Any civilised system of civil justice affords those who are accused of wrongdoing a fair opportunity to defend themselves in court. However, as a High Court ruling in a corporate insolvency case showed, disobeying judicial orders can place even that fundamental entitlement in jeopardy. The
Directors who do not fully understand the complex duties they owe to the companies they serve expose themselves to a risk of personal liability. That was certainly so in the case of two honest businessmen who unwittingly made unlawful distributions from their company’s reserves prior
Judges dealing with insolvency cases have an array of tools available to them that can be used to ensure the best possible outcome for creditors. In one case, the High Court engaged its rarely used power to appoint a receiver by way of equitable execution
The trouble with companies having only one active director is that, if he or she falls ill or is otherwise incapacitated, management can suffer severely. In a case on point, the High Court had to come to the aid of a company that found itself
An absence of assets to satisfy a judgment debt is not, by itself, a good reason for refusing to grant judgment in the first place. The High Court made that point in coming to the aid of the trustee of an insolvent employer’s pension scheme.
If you suspect that a company with which you trade is facing insolvency, it is vital to seek professional advice straight away. In a case on point, innocent suppliers of goods and services to a company that subsequently went into compulsory liquidation ended up severely
