Comprehensive protection against personal liability claims for company actions. Understand misfeasance risks, defense strategies, and how to safeguard your personal assets from liquidator claims.
Get immediate expert help - time is critical
Misfeasance claims are legal actions brought by liquidators against company directors for alleged breaches of duty that caused loss to the company or its creditors.
Under Section 212 of the Insolvency Act 1986, misfeasance occurs when a director breaches their fiduciary duties, resulting in financial loss to the company or its creditors.
Most common - appointed to recover assets
During administration proceedings
With court permission in some cases
In exceptional circumstances
Director must have breached their fiduciary or statutory duties
Company or creditors must have suffered quantifiable loss
Clear link between the breach and the financial loss
Misfeasance claims can result in personal liability for company losses, often running into millions of pounds. Directors can be held personally responsible for debts, losses, and damages caused by their actions or decisions.
Understanding the most frequent types of misfeasance claims helps directors identify risks and implement protective measures.
Section 214 Claims
Continuing to trade when the company had no reasonable prospect of avoiding insolvent liquidation, causing additional losses to creditors.
Potential Liability: Unlimited personal liability for company losses
Section 213 Claims
Carrying on business with intent to defraud creditors or for any fraudulent purpose, involving deliberate dishonesty.
Potential Liability: Unlimited + Criminal prosecution possible
Common Law Claims
Failing to act in the company's best interests, including conflicts of interest, self-dealing, and misuse of company assets.
Potential Liability: Compensation + Account for profits
Section 239 Claims
Making payments to certain creditors in preference to others during the company's financial difficulties, disadvantaging other creditors.
Potential Liability: Repayment of preference amount
Unreasonable director payments
Improper asset disposal
Unfair connected dealings
Inadequate oversight
Understanding your exposure to misfeasance claims is crucial for protecting your personal assets. Get a professional risk assessment today.