Re Continental Assurance Co of London plc

Re Continental Assurance Co of London plc [2007] 2 BCLC 287 (also, Singer v. Beckett) is a UK insolvency law case on wrongful trading under section 214 of the Insolvency Act 1986.

Re Continental Assurance Co of London plc
CourtHigh Court
Citation(s)[2007] 2 BCLC 287; [2001] All ER (D) 229
Keywords
Wrongful trading

Facts

Continental Assurance plc had gone into insolvent liquidation. The liquidators submitted that the directors were guilty of wrongful trading (Insolvency Act 1986 section 214). They had continued to trade after a crisis meeting, which should have made clear there was no reasonable prospect of coming out of insolvency. The liquidators also alleged misfeasance (section 212) through years of disorganised financial and accounting records and this was what made it difficult to tell whether the company was insolvent. Furthermore, payments to two other companies, IATA and ABTA, showed misfeasance.

Judgment

Park J held that the liquidators had failed to show a case of wrongful trading or misfeasance. The directors' action was appropriate given their available information and advice. They had made careful considerations at the crisis meeting.

Park J also held that if the liquidators were correct about misfeasance, it would only be the finance director that was liable, not the other directors. But the misfeasance claim was in respect of breach of directors' duties to Continental Assurance, and therefore a loss had to be shown. But the payments to IATA and ABTA had caused no loss.

gollark: See, this is why you should never let anyone else ever look at any of your personal devices or accounts.
gollark: Are you planning to say anything else?
gollark: Hm indeed, "MrEgg".
gollark: I suggested to my school that we be allowed to learn from home a few days a week, but apparently government says no to *that*, too.
gollark: It's entirely in person here and the government requires people to come.

See also
  • UK company law

Notes
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