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Walters, A. 
ORCID: 0000-0002-5854-4655,
2001.
Wrongful trading: two recent cases.
Insolvency Lawyer, 6, pp. 211-214.
ISSN 1350-5211
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Abstract
The purpose of this short note is to alert readers to two recent cases concerning directors' liability for wrongful trading. By way of reminder, the court's discretion to order a person to contribute personally to the assets of the company is only triggered if the company's liquidator can establish that: (a) the company has gone into insolvent liquidation (meaning that its assets are insufficient for the payment of its debts, other liabilities and the expenses of winding-up); and (b) at some time before the commencement of the winding-up of the company, the defendant knew or ought to have concluded that there was no reasonable prospect that the company would avoid going into insolvent liquidation; and (c) the defendant was either a director or shadow director of the company at that time.1 If these elements are established the court may make an order, but is not bound to do so. A defence is available if the defendant establishes that having reached the state of knowledge referred to in (b), he or she took every step with a view to minimising the potential loss to the company's creditors that he or she ought to have taken. In practice, the key substantive element is (b) as the matters in (a) and (c) will usually be self-evident.
| Item Type: | Journal article |
|---|---|
| Publication Title: | Insolvency Lawyer |
| Creators: | Walters, A. |
| Publisher: | Sweet & Maxwell/Thomson Reuters |
| Place of Publication: | London |
| Date: | 2001 |
| Volume: | 6 |
| ISSN: | 1350-5211 |
| Rights: | Permission is for Nottingham Trent University’s Institutional Repository only. Any further use (including storage, transmission or reproduction by electronic means) shall be the subject of a separate application for permission. |
| Divisions: | Schools > Nottingham Law School |
| Record created by: | EPrints Services |
| Date Added: | 09 Oct 2015 10:21 |
| Last Modified: | 09 Jun 2017 13:27 |
| URI: | https://irep.ntu.ac.uk/id/eprint/11698 |
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