Jurisdiction(s):
United Kingdom

Re Pro4Sport Ltd: directors' duties in insolvency, misfeasance under IA 1986 s212, s1157 relief, loss-of-chance damages, and proportionality/pleading of CA 2006 s190 substantial property transaction claims

Published on: 18 September 2015

Published by a LexisNexis Restructuring & Insolvency expert

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Article summary

Original news Re Pro4Sport Ltd (in Liquidation); Subnom Hedger (Liquidator of Pro4Sport Ltd) v Adams [2015] EWHC 2540 (Ch), [2015] All ER (D) 12 (Sep)

The Chancery Division rejected a misfeasance application brought by the company’s liquidator under IA 1986, s 212 against the respondent, who had formerly been a director and the majority shareholder. The court concluded, among other points, that the allegation under CA 2006, s 172 did not succeed, and the respondent had not contravened his duty of care and skill under CA 2006, s 174...

What was the background to the application?

In 2012, shortly before Pro4Sport Ltd entered creditors’ voluntary liquidation, its director and majority owner arranged for the company to dispose of its assets to an associated entity, Pro4Sport.co.uk (Pro4), for deferred consideration of £56,400. The sole protection taken was a retention of title provision. Pro4 remitted £35,910 towards the price before itself entering creditors’ voluntary liquidation in 2014. The liquidator then pursued misfeasance proceedings against the director under IA 1986, s 212, asserting that the transaction breached his duties under CA 2006, ss 172, 174 and (potentially) 190, and caused loss to Pro4Sport Ltd of £20,490 (being the difference between the price and...

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