- Director ordered to repay loan, despite twilight accounting treatment (Bass v Buchanan)
- What are the practical implications of this case?
- What was the background?
- What did the court decide?
- Case details
Restructuring & Insolvency analysis: The court held that a director was liable to repay sums advanced to them by the company of which they had been sole director and shareholder. The arguments raised by the respondent included that: (i) they should be entitled to retain the sums as compensation for their endeavours; (ii) the loan account had been ‘reclassified’ in the months before entry into liquidation; (iii) that supposed ‘reclassification’ had been on the advice of the insolvency practitioner (IP) (pre-appointment); (iv) they had left the issues of remuneration and accounting to others; and (v) limitation barred claims in respect of many of the payments made. All of those arguments were rejected by the court. Written by Samuel Parsons, barrister at Guildhall Chambers, Bristol.
Sign in or take a trial to read the full analysis.
To continue reading this news article, as well as thousands of others like it, sign in to LexisPSL or register for a free trial