“This was a distressing period for me and I was glad that I contacted Thomas Riley of NDP, who immediately put me at ease and made the situation much more bearable.”

Misfeasance claims against directors are brought by liquidators against directors of insolvent companies at liquidation, and often involve an allegation that a director has misapplied money or other property of the company and/or breached his/her duties as a director. These claims can be highly stressful, as the director has already had to liquidate his/her company and stands to have to pay out much more to settle the claim. In this case study, our client explains how one of our misfeasance specialist solicitors, Thomas Riley, was able to convince the Liquidator to drop the claim.

Misfeasance claims

Our client takes up the story

Our client’s company entered a Creditors Voluntary Liquidation, which led to the Liquidators investigating a loan that the Company made to a 3rd party for £77,700.

“Following on from the liquidation of my company, the Liquidator contacted me alleging that I had breached various fiduciary and statutory duties as a director of the company, pursuant to the Companies Act 2006 and Insolvency Act 1986 for a directors’ loan granted by the Company. The insolvency claims against me totalled £77,700.

After asking me to explain why the loan was granted, the Liquidator then informed me that unless I made offers to settle the claim, he would assign the claim to an insolvency litigation funder, who would then issue a claim against me for misfeasance.”

The Director contacted Misfeasance Claims Solicitor, Thomas Riley

“With a potential claim against me looming, I called Thomas Riley of NDP and he quickly got to grips with this complicated case, which had an international element to it, and reassured me that I had good prospects of successfully defending the claim. I subsequently instructed Thomas Riley to represent me, and he drafted a letter of representations to the Liquidator. Thomas asked this letter to be brought to the attention of the insolvency litigation funder prior to any assignment of the claim and explained the reasons for the loan and how I had not breached any of my duties as a director by permitting the company to grant the loan.”

The Liquidator decided not to pursue the claim

“Upon consideration of the letter, the liquidator responded with confirmation that he would no longer be looking to pursue a claim against me.

This was a distressing period for me and I was glad that I contacted Thomas, who immediately put me at ease and made the situation much more bearable. I would like to thank NDP for their excellent legal services and would happily recommend them to others who require their services.”

Talk to our specialist solicitors if facing Misfeasance Claims

We were delighted with the outcome of our work in this case. It shows the pragmatic and committed approach that our insolvency litigation specialists take on behalf of our clients when they are facing a misfeasance claim. Click here to see some of our insolvency and misfeasance testimonials.

If you are facing a misfeasance claim from a liquidator, look at our article ‘5 Tips for Directors Facing Misfeasance Claims’ and then contact us or call is on 0121 200 7040 for a free initial chat. The sooner you get in touch, the more we can do to help.