LEXLAW Solicitors & Barristers
Sections 235 and 236 of the Insolvency Act 1986 impose powerful duties on company directors, officers, employees, and even third parties to co-operate with insolvency office-holders such as liquidators and administrators. Failure to assist properly during liquidation, administration, or bankruptcy can result in personal sanctions, court orders, fines, and even director disqualification.
The High Court ordered Mr Steven Bell to repay substantial sums after causing BSS LED [R&D] Limited to enter into transactions at an undervalue and make preferential payments to connected companies, in breach of directors’ duties under the Companies Act 2006 and the Insolvency Act 1986.
The High Court held that Ronojoy Nag was liable for misfeasance and breach of fiduciary duty after diverting company assets during insolvency, while his wife Amanda Nag was found liable for dishonest assistance and knowing receipt, ordering both to account for misapplied funds.
The High Court considered the application of the Braganza duty in a banking litigation context, ruling that the bank breached its procedural fairness obligations when exercising discretionary powers, reinforcing directors’ and financial institutions’ duties under UK law.
The Court of Appeal upheld the High Court’s dismissal of Manolete Partners’ £849,278 claim against director Ebrahim Dalal, finding the evidence for alleged unreported sales too weak to meet the civil standard of proof. The case underscores the evidential challenges liquidators face when pursuing directors for purported accounting deficiencies.