Tag: Directors Duties | LEXLAW Solicitors & Barristers

Directors Duties in the Zone of Insolvency (Sequana)

Insolvent Company Directors’ Personal Liability: BTI v Sequana Explained

If your company is struggling financially, your legal duties as a director change before formal insolvency begins. When does a company director’s duty shift from shareholders to creditors? Following the Supreme Court ruling in BTI v Sequana, directors face strict legal consequences for decisions made during a company’s financial distress. Learn the exact legal triggers for creditor duty and how to avoid claims for breach of fiduciary duty.

Post date 16 September 2026
Post author By Hamza Chaudhry
Post categories In Company Insolvency, Court of Appeal, Director's Duties, Insolvency Litigation, Wrongful Trading
Tags BTI v Sequana, corporate insolvency, creditor duty, Directors Disqualification, Directors Duties, Misfeasance, s.172 Companies Act 2006, Wright v Chappell BHS, Wrongful trading, zone of insolvency

Supreme Court Raises the Bar for Directors’ Good Faith Duty

In a significant July 2026 ruling, the Supreme Court has confirmed that a director’s duty to act in good faith under section 172 of the Companies Act contains an objective element. A director who covertly pursues his own preferred outcome while misleading the board breaches his fiduciary duty, even where his motives are sincere.

Defending Claims Brought by Liquidators: A UK Director’s Guide

When a company enters liquidation, the liquidator investigates the conduct of its directors and can pursue personal claims for misfeasance, wrongful or fraudulent trading, preferences, transactions at an undervalue and transactions defrauding creditors. This succinct guide explains each claim and, crucially, how a director can defend it.

Guide: Impact of Compulsory Winding-up Order Liquidation on Directors

This detailed guide explains the impact of compulsory liquidation. Early engagement with specialist insolvency and tax counsel is the most critical factor in minimising director exposure and defending or managing the process effectively. Our specialist solicitors and barristers are available to assist on a discounted fixed fee arrangement.

Post date 5 December 2025
Post author By LEXLAW Solicitors & Barristers
Post categories In Director's Duties, Directors Disqualification, Directors Loan Account, HMRC, Insolvency, Insolvency Litigation, Litigation, Transactions at Undervalue, Winding-up Petitions
Tags Companies, Company Directors Disqualification Act 1986, Compulsory Liquidation, CVA, Directors Disqualification, Directors Duties, Frozen Bank Account, HMRC, Insolvency, Liquidation, Overdrawn DLA, Penalty Liability Notice, PLN, Statutory Demand, Winding Up Petition

Silhouetted business directors reviewing financial documents outside the Rolls Building, with overlaid company accounts suggesting investigation and insolvency litigation.

Manolete Case Study: Breach of Directors’ Duties Over Unlawful £560k Dividend

The High Court held that Paul and Joanne Rutter unlawfully reduced their directors’ loan account by £560,000 through a back-dated dividend and misapplied over £256,000 of company funds on their personal properties while Rut5 Ltd was approaching insolvency, breaching duties under the Companies Act 2006 and the Insolvency Act 1986.

Post date 5 December 2025
Post author By Qasim Mehmood
Post categories In Administrative Law, Case Law, Case Study, Default Judgment, High Court, Litigation, Manolete, Media, News, Solicitors, Supreme Court
Tags Breach, Business Court, companies act 2006, Company Funds, Corporate Governance, Director claims, Directors Duties, Financial Misconduct, High Court, Insolvency, Insolvency Act, Legal Defence, Liquidator Claims, Litigation, Loan Account, Manolete, Misfeasance, Property Development, UK Law, Unlawful Dividend

Manolete Case Study: Directors Liable for £1.4m Misappropriation and Unlawful Dividends

The High Court ordered the former directors of Evershine Travel Limited (In Liquidation) to repay more than £1.4 million after treating company funds as their own and authorising unlawful dividends while the company faced a £17.58 million deficit to creditors. The case highlights the severe consequences for directors who breach duties owed under the Companies Act 2006 once a company approaches insolvency.

Manolete Case Study: Director Ordered to Repay £1.43m for Unauthorised Expenditure (Director’s Duties & Insolvency Act Breaches)

The High Court ordered Dr Amir Matta, director of Saint George Investment Holdings Ltd, to repay £1.43 million after he misapplied company funds for personal expenses, breaching his statutory duties under the Companies Act 2006 and authorising unsubstantiated payments to connected parties during a period of financial distress.

Post date 1 August 2025
Post author By LEXLAW Solicitors & Barristers
Post categories In Administration, Case Law, Case Study, Chancery Division, Director's Duties, Directors Disqualification, High Court, HMCTS, Insolvency, Insolvency Litigation, Litigation, Litigation Funding, Manolete
Tags companies act 2006, Defending Manolete Claims, Directors Duties, Directors’ Duties Claims, Insolvency, Insolvency Act 1986, Insolvency Law, lexlaw, LexLaw case studies, Litigation, Manolete, Manolete Case Studies

Hunt v. Balfour-Lynn: No Breach of Duty for Directors entering into a Tax Avoidance Scheme

Our Director Liability litigation team review this recent judgment where a liquidator lost a claim for breach of director’s duties over a tax avoidance scheme.

Post date 11 August 2022
Post author By LEXLAW Solicitors & Barristers
Post categories In Director's Duties, Insolvency, Winding-up Petitions
Tags Directors Duties, High Court, Litigation, Tax, Tax Avoidance

COVID-19: Suspension of liability for wrongful trading ended on 30 September 2020

The Corporate Insolvency and Governance Act (“CIGA”) came into force on 26 June 2020 introducing a number of reforms aimed at providing protection to directors and companies in financial distress,…

Post date 13 October 2020
Post author By Aashma Marahatta
Post categories In COVID-19, Director's Duties, Directors Disqualification, Wrongful Trading
Tags ciga 2020, COVID-19, Director Disputes, Directors Duties, Wrongful trading

COVID-19 and Financial Distress: Directors’ duties

As a result of COVID-19, many companies are facing financial difficulties and distress. How directors respond will depend on the nature of the business, the current financial status…

Post date 26 March 2020
Post author By Sophia Hanif
Post categories In Coronavirus, COVID-19, Directors Disqualification, Insolvency, Uncategorized
Tags corporate insolvency, Directors, Directors Disqualification, Directors Duties

Insolvent Company Directors’ Personal Liability: BTI v Sequana Explained

Supreme Court Raises the Bar for Directors’ Good Faith Duty

Defending Claims Brought by Liquidators: A UK Director’s Guide

Guide: Impact of Compulsory Winding-up Order Liquidation on Directors

Manolete Case Study: Breach of Directors’ Duties Over Unlawful £560k Dividend

Manolete Case Study: Directors Liable for £1.4m Misappropriation and Unlawful Dividends

Manolete Case Study: Director Ordered to Repay £1.43m for Unauthorised Expenditure (Director’s Duties & Insolvency Act Breaches)

Hunt v. Balfour-Lynn: No Breach of Duty for Directors entering into a Tax Avoidance Scheme

COVID-19: Suspension of liability for wrongful trading ended on 30 September 2020

COVID-19 and Financial Distress: Directors’ duties

Have you been served with a Charging Order?

Insolvent Company Directors’ Personal Liability: BTI v Sequana Explained

York SD Ltd and Others v HMRC: What the Rooftop Solar EIS Appeal Means for Investors and Companies

Preparation for Mediation in UK

Drelle v Servis-Terminal: Foreign Judgments & Bankruptcy