Misfeasance: Where You Have Breached Your Fiduciary Duties As A Director
This arises when you have been in a breach of your legal fiduciary duties as a director. For example, you may have withdrawn money improperly from a company or may have incurred misappropriation of company funds for purposes not consistent with the business.
These are areas that will be investigated by the appointed Liquidator and you may have already been questioned in person or responded to written questions from a Liquidator. On application by the Liquidator, the Court can compel the directors to repay, restore or account for the money or property, or contribute without financial limit, such sums to the company’s assets by way of compensation, if the Court so directs.
You may be aware this allegation will be made, or you may only find out about it when you receive a letter of claim from your Liquidator. We often receive enquiries where financial advice from an accountant has been taken but external events have meant that the advice could not be completed. If you are aware or are concerned that you may have breached your fiduciary duty as a director, then you should obtain legal advice at an early stage.
It is also important to respond to the letter of claim immediately when you receive it from the Liquidator. In failing to reply, the Liquidator may issue Court proceedings and you may incur substantive legal costs. You should settle early if you feel that a settlement is the inevitable outcome.
Our team can assist you if you have concerns about liability as a director may impact your business or future business opportunities. If you would like to have a confidential discussion with a member of our team, please complete our Contact Us Form, and we will call you back at a time that is suitable for you or you can contact us directly on 01908 414990.
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