In force2020 Revised Edition

Contents

Insolvency, Restructuring and Dissolution Act 2018 · 2020 Revised Edition · Part 9 · Provisions Applicable in Judicial Management and Winding Up

240. Power of Court to assess damages against delinquent officers, etc.

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(1)

If, in the course of the judicial management or winding up of a company, it appears that any person who has taken part in the formation or promotion of the company or any past or present judicial manager, liquidator or officer of the company has misapplied or retained or become liable or accountable for any money or property of the company or been guilty of any misfeasance or breach of trust or duty in relation to the company, the Court may, on the application of the judicial manager or liquidator or of any creditor or contributory —

(a)

examine into the conduct of such person, judicial manager, liquidator or officer; and

(b)

compel such person, judicial manager, liquidator or officer to —

(i)

repay or restore the money or property or any part of such money or property with interest at such rate as the Court thinks just; or

(ii)

contribute such sum to the property of the company by way of compensation in respect of the misapplication, retainer, misfeasance or breach of trust or duty as the Court thinks just.

(2)

This section extends and applies to and in respect of the receipt of any money or property by any officer of the company during the 2 years preceding the commencement of the judicial management or winding up (as the case may be) whether by way of salary or otherwise, appearing to the Court to be unfair or unjust to other members of the company.

(3)

This section has effect even if the offence is one for which the offender is criminally liable.

Terms defined in this Act

commencement of the judicial management
Defined · s 217
“commencement of the judicial management”, in relation to a company, means —(a)in a case where the judicial manager is appointed by the Court under section 91 — the time when the application for the judicial management order was made; or(b)in a case where the judicial manager is appointed by the creditors of the company under section 94(11)(e) — the time when the copy of the notice of appointment of the interim judicial manager is filed with the Registrar of Companies and the Official Receiver under section 94(5)(a);
Open s 217
company
Defined · s 2
“company” has the meaning given by section 4(1) of the Companies Act 1967;
Open s 2
contributory
Defined · s 2
“contributory” has the meaning given by section 4(1) of the Companies Act 1967;
Open s 2
Court
Defined · s 2
“Court” means the General Division of the High Court;
Open s 2
creditor
Defined · s 273
“creditor”, in relation to a debtor proposing a voluntary arrangement under Part 14, means a creditor to whom the debtor owes a debt provable in bankruptcy;
Open s 273
judicial manager
Defined · s 88
“judicial manager”, in relation to a company, means a person appointed under this Part to manage the company and its affairs, business and property, but does not, unless a contrary intention appears, include an interim judicial manager;
Open s 88
liquidator
Defined · s 2
“liquidator” includes the Official Receiver when acting as the liquidator of a corporation;
Open s 2
officer
Defined · s 61
“officer”, in relation to a corporation, includes —(a)a director or secretary of the corporation, or a person employed in an executive capacity by the corporation;(b)a receiver and manager of any part of the undertaking of the corporation appointed under a power contained in any instrument; and(c)a liquidator of a company appointed in a voluntary winding up,but does not include —(d)a receiver who is not also a manager;(e)a receiver and manager appointed by the Court;(f)a liquidator appointed by the Court or by the creditors; or(g)a judicial manager appointed under Part 7;
Open s 61
property
Defined · s 2
“property” includes —(a)money, goods, things in action, land and every description of property, wherever situated; and(b)obligations and every description of interest, whether present or future or vested or contingent, arising out of or incidental to property;
Open s 2