Wrongful Trading in UK Law

Leading Cases
  • Phillip Roberts (as Liquidator of Onslow Ditchling Ltd) v Peter Frohlich and Another
    • Chancery Division
    • 18 Febrero 2011

    In my judgment each ought to have concluded at or about 1 September 2004 (certainly by ( say) 14 September 2004) that there was no realistic prospect of avoiding an insolvent liquidation.

  • Ward v Aitken and Others ; Re Oasis Merchandising Services Ltd
    • Court of Appeal (Civil Division)
    • 09 Octubre 1996

    Considerations such as these lead us to consider whether a distinction should not be drawn between assets which are the property of the company at the time of the commencement of the liquidation (and the property representing the same), including rights of action which arose and might have been pursued by the company itself prior to the liquidation, and assets which only arise after the liquidation of the company and are recoverable only by the liquidator pursuant to statutory powers conferred on him.

    We respectfully agree, supporting as it does the distinction which we would draw between the property of the company at the commencement of the litigation (and property representing the same) and property which is subsequently acquired by the liquidator through the exercise of rights conferred on him alone by statute and which is to be held on the statutory trust for distribution by the liquidator.

  • Re Sevenoaks Stationers (Retail) Ltd
    • Court of Appeal (Civil Division)
    • 31 Julio 1990

    Mr. Cruddas made a deliberate decision to pay only those creditors who pressed for payment. The obvious result was that the two companies traded, when in fact insolvent and known to be in difficulties at the expense of those creditors who, like the Crown, happened not to be pressing for payment. Such conduct on the part of a director can well, in my judgment, be relied on as a ground for saying that he is unfit to be concerned in the management of a company.

  • Colin Thomas Burke (Liquidator of Idessa (UK) Ltd) and Another v John Morrison and Another
    • Chancery Division
    • 31 Marzo 2011

    I am satisfied that whether it is to be viewed strictly as a shifting of the evidential burden or simply an example of the well-settled principle that a fiduciary is obliged to account for his dealings with the trust estate that Mr Aslett is correct to say that once the liquidator proves the relevant payment has been made the evidential burden is on the Respondents to explain the transactions in question.

  • Stone and Rolls Ltd ((in Liquidation)) v Moore Stephens (A Firm)
    • House of Lords
    • 30 Julio 2009

    The company is not fixed with its directors' fraudulent intentions because that would be unjust to its innocent participators (honest directors who were deceived, and shareholders who were cheated); the guilty are presumed not to pass on their guilty knowledge to the innocent.

  • Nori Holding Ltd and Others v Public Joint-Stock Company 'Bank Otkritie Financial Corporation'
    • Queen's Bench Division (Commercial Court)
    • 06 Junio 2018

    In this case the parties' dispute is a straightforward factual dispute whether the August transactions constitute a fraud carried out on the Bank to replace valuable secured loans with worthless bonds. A variety of legal labels can be and have been attached to that claim, including the labels of transaction with unequal consideration and abuse of rights under Russian law and conspiracy to defraud under Cypriot law.

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Legislation
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Books & Journal Articles
  • Wrongful Trading: An Impotent Remedy?
    • No. 4-1, March 1996
    • Journal of Financial Crime
    • 38-46
    Improved creditor and community protection seemed attainable goals when Professor Daniel Prentice described s. 214 of the Insolvency Act (‘s. 214’) as ‘one of the most important developments in com...
  • Application for a declaration that the director has been engaged in wrongful trading
    • Contents
    • Watson-Gandy On Corporate Insolvency Practice - 2nd Edition
    • Mark Watson-Gandy
    • 363-376
  • What Can We Expect to Gain from Reforming the Insolvent Trading Remedy?
    • No. 78-1, January 2015
    • The Modern Law Review
    This paper argues that reform of the wrongful trading remedy in section 214 of the Insolvency Act 1986 is unlikely to yield significant increases in civil recovery for creditors of insolvent compan...
    ... ... What Can We Expect to Gain from Reforming the Insolvent Trading Remedy? Richard Williams * This paper argues that reform of the wrongful trading remedy in section 214 of the Insolvency Act 1986 is unlikely to yield significant increases in civil recovery for creditors of insolvent ... ...
  • Index
    • Contents
    • Watson-Gandy On Corporate Insolvency Practice - 2nd Edition
    • Mark Watson-Gandy
    • 491-502
    ... ... Administration orders, discharge of; ... Fraudulent trading; Preferences; Transactions at an undervalue; Transactions prejudicial to reditors; Wrongful trading appointment by court, see Administration orders out of court ... ...
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Law Firm Commentaries
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Forms
  • Apply to become someone's deputy (make a declaration)
    • HM Courts & Tribunals Service court and tribunal forms
    Court of Protection forms including the COP1 application to make decisions on someone's behalf.
    ... ... been the subject of a declaration under section 213 (fraudulent trading) ... or section 214 (wrongful trading) of the Insolvency Act 1986? ... If ... ...
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