Rewriting the Rule Book on Insolvency Directors See Short Cuts Blocked

Big business is often about survival.

Working hard to create visibility, maintain credibility and foster profitability isn’t always easy, and sometimes, it’s all about weathering the storm and digging in your heels.

Survival shouldn’t be about escaping responsibilities though, and a recent ruling by a judge is looking to stop company directors looking for an easy way out.

Up until recently, company directors have been able to effectively sidestep existing debts by filing for insolvency, but now, any duties that are owed by a director will live on beyond the collapse of a company.

This effectively means that directors won’t be able to buy up assets ‘on the cheap’ and start again where they left off.

This isn’t an advisory either, it is a ruling from the High Court that directors of insolvent companies should no longer be allowed to purchase assets of the failed business at reduced rates.

It all stems from a landmark case where the director of an insolvent company ‘unfairly’ purchased a house from a less than professional insolvency practitioner, just 18 months after his company went into liquidation.

A judge ruled that the director must’ve known that the sale was completed at a much-undervalued price, and that it was of no benefit to any of the creditors from the insolvency.

This was the first case to consider what directors’ duties survive the insolvency of a company and will come as good news to any parties who are left out of pocket when a company goes into administration.

The judge ruled that ‘the duties owed by a director to the company and its creditors survive the company’s entry into administration and voluntary liquidation’.

What this means is that directors can’t find an easy way out of debts and settlements by placing their company into administration or liquidation, only to re-establish themselves through the repurchase of the assets via ‘sideways looking’ insolvency practitioners.

Cleaning things up, a little.

Survival is important, but it must be done in the right way.

To find our more about us click below:

Contact us direct:



84 views0 comments

The statements and opinions expressed in this article are those of the author and do not necessarily reflect those of Court Enforcement Specialists.  Comments are welcome. However, the blog owner reserves the right to edit or delete any comments submitted to this blog without notice.  The author will not be held responsible for any comments posted by visitors to this site. The author is not responsible for the content in comments.  

Court Enforcement Specialists does not take any responsibility for the views of the author.  Please note this blog is not to provide specific legal advice.  This blog disclaimer is subject to change at anytime.

Helpful Contacts

Money Advice Service: 0300 500 5000

Debt Advice Foundation: 0800 043 4050

CAB: 0300 330 1313

PayPlan: 0800 280 2816

National Debt Line: 0808 808 4000

Stepchange: 0800 138 1111

Helpful Links

Head Office


0161 507 0626


Victoria House, Great Ancoats Street, Manchester, M4 7DB

Professional Business of the Year-02[147
New Business Start-up of the Year-02[147

© 2018 by Court Enforcement Specialists

Court Enforcement Specialists Ltd operates in England and Wales.