Claimant law firms are working hard to develop routes for holding parent companies and their boards responsible for trading activities carried out through subsidiary companies. The recent decision in Aston Risk Management v Jones and others provides clarity on when a registered director of a parent company can be found to be a de facto director of an operating subsidiary.
A director has been found liable in the High Court for fraudulent trading as a result of failing to carry out proper due diligence in a series of transactions which were found to be part of a VAT fraud scheme.
The claim was brought against the director by the Liquidator of JD Group Limited (the “Company”).
Background
Introduction
Solvency test
Standing and process
Purposes of administration
Effects of administration order
Administrator's duties and functions
Remuneration and swearing in of administrator
Introduction
The Companies (Guernsey) Law, 2008 (“Companies Law”) provides for companies, protected cell companies (“PCCs”), incorporated cell companies (“ICCs”) and cells of PCCs and ICCs to be placed into administration and for an administrator to be appointed to manage that entity's affairs whilst the administration order remains in force.
Campbell v Peter Gordon Joiners Ltd (in liquidation) and another (2016) UKSC 38 considered whether an employee could successfully bring a civil action against a director of a company in liquidation for having failed to obtain appropriate employers' liability insurance.
C was an apprentice joiner employed by a company who suffered an injury at work whilst working with an electric saw. The company held employers’ liability insurance but it did not respond to C's claim as the policy excluded claims arising from the use of “woodworking machinery” powered by electricity.
In September 2012, Grant Thornton were appointed by the Royal Court of Guernsey as joint administrators of a Guernsey company called Montenegro investments limited (MIL) - a Guernsey property Investment Fund.. The joint administrators then appointed Ogier.
Current Status of MIL