Director Ordered to Repay Liquidators
The High Court ruled that directors of an insolvent business should not be allowed to buy assets on the cheap.
A court ruled that the director of Systems Building Services Group must pay the liquidators of his company the money he saved by buying a property his company owned at a discount. The director didn’t put the property on the market before buying it and was able to buy it at a substantial discount.
The director bought the property from the administrators of his company 18 months after the administration.
The action was brought against the director by a litigation firm acting for the Company’s liquidators.
The judge ruled that as an experienced businessman the director couldn’t possibly have believed that the transaction was in the interest of creditors.
In his judgement Barber J said that ‘the duties owed by a director to the company and its creditors survive the company’s entry into administration and voluntary liquidation.’
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