The Court of Appeal has recently considered whether an LPA Receiver owes a duty of care to a bankrupt mortgagor in connection with the way the Receiver deals with the mortgaged property. In a decision which will be welcomed by Receivers and their insurers, the court decided that a Receiver owes no such duties.
The facts
In April 2013, the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO) came into force, making the success fee applied to a Conditional Fee Arrangement (CFA), and the After the Event (ATE) insurance premiums, irrecoverable by a successful party to litigation proceedings. However, under article 4 of LAPSO, there is an "insolvency exemption" making these costs recoverable by an insolvency practitioner.
A recent court ruling highlights the need for robust governance practices for nonprofits, particularly those facing financial difficulties. The Third Circuit Court of Appeals affirmed a jury’s award of $2.25 million in compensatory damages against former directors and officers of a bankrupt nonprofit corporation - personal liability for breach of fiduciary duties and “deepening insolvency.”1 The court also affirmed punitive damages against the officer defendants, but vacated the award of punitive damages against the director defendants.