Whether you are the director of a company who is in financial difficulty, or a creditor of a company you suspect is insolvent or has gone in to liquidation, our specialist litigation lawyers can assist you in ensuring you are in the best possible position to protect your interests, whatever they may be.
Directors of companies owe certain duties to the company pursuant to the Corporations Act 2001 and at law generally. These include:
(a) The duty to exercise powers and duties with the care, skill and diligence which a reasonable person would have. This includes taking steps to ensure a director is properly informed about the financial position of the company, and ensuring the company does not trade while it is insolvent;
(b) The duty to exercise a director’s powers and duties in good faith and for a proper purpose;
(c) The duty not to improperly use a director’s position to gain an advantage for themselves or someone else; and
(d) The duty not to improperly use information obtained through their position as a director of the company for their own advantage, or the advantage of someone else.
The duty not to trade while insolvent does not only carry significant risks for a director opening themselves up to a claim by a liquidator. A creditor is also able to take direct action against a director of a company in relation to insolvent trading in certain circumstances.
If you think a company of which you are a director is trading while insolvent, please contact us to discuss your possible options as soon as possible.
Similarly, if you are a creditor who is seeking to enforce a debt, your best chance at recovering the debt might be to seek to a liquidator appointed to the company, and then work with the liquidator to seek to recover assets held by directors and officers of the company, or other related entities, in order to recover some or all of the debt owed to you.
We also specialise in bankruptcy and personal insolvency, whether in relation to assisting an individual going through financial difficulties to file a debtor’s petition making themselves bankrupt, or on behalf of a creditor seeking to make someone who owes them money bankrupt.
As with taking steps to liquidate a corporation, it is often the case that the best means by which to recover a debt owed to you by an individual is to take steps to have them declared bankrupt, have a trustee in bankruptcy appointed to their affairs, and then seek to have the trustee use their special powers to recover assets held by related parties in order to bring those back into the bankrupt estate, and distribute these to the creditors of the bankrupt.