Defending Directors

We can also help directors defend claims against them personally to avoid personal liability.

Directors make decisions by majority vote at board meetings or by all the directors signing a written resolution.

Directors must keep proper books and records including those relating to financial transactions.

A director cannot simply resign to avoid personal responsibility as a liquidator can go back and scrutinise past conduct to make claims against directors.

Directors should –

  • Make careful notes and take minutes of decisions and steps taken to protect the company's creditors and suppliers.
  • Show that they considered management accounts and financial information, including cash flow forecasts, budgets and profit and loss accounts and made responsible and regular decisions not to unduly place creditors at risk
  • Negotiate a time to pay(TTP) arrangement with the HMRC if it the company cannot pay the taxes and act responsibly

We can help directors defend the following claims –

  • Preference payments - where it is argued that a creditor is preferred by being paid instead of the other creditors.
  • Transactions at an undervalue – where assets are sold less than market value reducing the amount available for creditors.
  • Overdrawn directors loan accounts - where a claim is made to restore the company account.
  • Unlawful dividend payments - where dividend payments are made where the distributable profits were insufficient to support these payments being made out of the company bank account leaving less money available to creditors.
  • Fraud and deceit claims - where it is alleged that misleading or non-accurate statements were made causing others to sustain a loss.
  • Personal guarantee claims – we can advise you to see whether any PG is invaild and unenforceable and should be set aside due to misrepresntation or mistake and whether there are technical arguments available to you.

Directors can be disqualified from acting as directors for up to 15 years and be made personally bankrupt and therefore it is very important that they take proper legal advice as early on as possible especially in uncertain economic times.
Claims Against Directors
Defending Directors
Director Disqualification

Please call or email us for a free initial confidential discussion

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