Rely on the most comprehensive, up-to-date legal content designed and curated by lawyers for lawyers
Work faster and smarter to improve your drafting productivity without increasing risk
Accelerate the creation and use of high quality and trusted legal documents and forms
Streamline how you manage your legal business with proven tools and processes
Manage risk and compliance in your organisation to reduce your risk profile
Stay up to date and informed with insights from our trusted experts, news and information sources
Access the best content in the industry, effortlessly — confident that your news is trustworthy and up to date.
Find up-to-date guidance on points of law and then easily pull up sources to support your advice with Lexis PSL
With over 30 practice areas, we have all bases covered. Find out how we can help
Our trusted tax intelligence solutions, highly-regarded exam training and education materials help guide and tutor Tax professionals
Regulatory, business information and analytics solutions that help professionals make better decisions
A leading provider of software platforms for professional services firms
In-depth analysis, commentary and practical information to help you protect your business
LexisNexis Blogs shed light on topics affecting the legal profession and the issues you're facing
Legal professionals trust us to help navigate change. Find out how we help ensure they exceed expectations
Lex Chat is a LexisNexis current affairs podcast sharing insights on topics for the legal profession
Discuss the latest legal developments, ask questions, and share best practice with other LexisPSL subscribers
What ability do liquidators have to recover dividends paid to owner-managers when the company is insolvent? Steven Fennell, barrister at Exchange Chambers, examines the answer in Global Corporate Ltd v Hale and says while the case might be one limited to its facts if it is followed in future cases involving more normal accounting methods, it may create real obstacles to liquidators seeking to recover monies from directors.
Global Corporate Ltd v Hale  EWHC 2277 (Ch),  All ER (D) 50 (Sep)
The Chancery Division ruled, in proceedings which arose out of the liquidation of a company, that payments made by the respondent director of the company did not amount to dividends and that sections 830 and 847 of the Companies Act 2006 (CA 2006) did not apply to them. The applicant company had purchased the claim under a deed of assignment executed by the liquidators of the company. The court, in dismissing the application for a declaration, held that the payments were not unlawful dividend payments—they did not amount to a transaction at an undervalue and/or a preference—and that the respondent was not liable for misfeasance, under CA 2006, s 212.
Powerstation UK Ltd (the company) traded as a vehicle tuning centre, with two directors and shareholders. Its financial difficulties began with the recession in 2008 and eventually led to its insolvent liquidation in 2015. The defendant director paid himself through a combination of salary and dividends on the company’s accountant’s advice. He took £1,383 per month in addition to his nominal salary, signing dividend tax forms each month. At the end of the financial year, the company’s accountant would decide whether there had in fact been sufficient profits and, when there were not, the shortfall would be declared as PAYE earnings and additional payments made to HMRC. This was not done for the final year of the company’s trading, when
Free trials are only available to individuals based in the UK
* denotes a required field
**excludes LexisPSL Practice Compliance, Practice Management and Risk and Compliance. To discuss trialling these LexisPSL services please email customer service via our online form. Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason. Trial includes one question to LexisAsk during the length of the trial. See our full terms here.
Access this article and thousands of others like it free by subscribing to our blog.
Read full article
Already a subscriber? Login
Stephen qualified as a solicitor in 2005 and joined the Restructuring and Insolvency team at Lexis®PSL in September 2014 from Shoosmiths LLP, where he was a senior associate in the restructuring and insolvency team.
Primarily focused on contentious and advisory corporate and personal insolvency work, Stephen’s experience includes acting for office-holders on a wide range of issues, including appointments, investigations and the recovery and realisation of assets (including antecedent transaction claims), and for creditors in respect of the impact on them of the insolvency of debtors and counterparties.
0330 161 1234