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Some hope for creditors

By Tony Johnson - 17 Jun 2013

The recent High Court judgment in Hampson v Registrar of Companies has reaffirmed that in some circumstances a creditor of a company in liquidation may have a direct right of action against a director of that company.

Section 301 of the Companies Act allows a creditor, liquidator or shareholder of a company that has gone into liquidation, to bring an action against a director for breaches of the Companies Act. Such actions are usually brought on behalf of the company itself. This means that if such an action is successful, any funds recovered from the director will become an asset of the company, and will be distributed by the liquidators for the benefit of all creditors.

However, in some circumstances (generally where the creditor has personally been defrauded by the director's actions) a different approach can be available. The Court may exercise its discretion to order that the director transfer the money or property, that had belonged to the company, directly to the applicant creditor, rather than to the company in liquidation. Any such money or property would be retained by the creditor and would not form part of the assets within the liquidation.

If as a creditor you find yourself in the position above (or if you just have a general interest) contact us for more information.


Tony Johnson


Hampson v Registrar of Companies



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