Misfeasance claims under section 212 of the Insolvency Act 1986
Published by a LexisNexis Restructuring & Insolvency expert
Practice notesMisfeasance claims under section 212 of the Insolvency Act 1986
Published by a LexisNexis Restructuring & Insolvency expert
Practice notesWhat is Misfeasance?
A claim under section 212 of the Insolvency Act 1986 (IA 1986) operates where a person caught by the section has:
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misapplied, retained or become accountable for any money or other property of the company
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breached any fiduciary or other duty owed in relation to the company, or
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otherwise been guilty of misfeasance
Claims commenced under IA 1986, s 212 are procedural claims against individuals caught by that section. IA 1986, s 212 itself (unlike wrongful trading and Fraudulent trading claims brought under IA 1986, ss 213–214) does not create a separate cause of action but merely provides an alternative IA 1986 procedure for existing causes of action against certain individuals. A liquidator may proceed under IA 1986, s 212 in addition to seeking relief on another basis.
When examining a director’s conduct the general duties of directors set out sections 171–177 of the Companies Act 2006 (CA 2006) should be considered which codifies certain common law and equitable duties of directors. In
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