Breaches of directors' duties
We offer a breadth of experience at team and partner level in all manner of matters involving alleged breach of director’s duties, from formal regulatory investigations (including official corruption and insider trading investigations) and public examinations, to recovery litigation, insolvent trading and preference actions.
Insolvent trading and breaches of duty: We acted for a liquidator who was seeking recovery of over a million dollars from an Australian director of a company with a foreign parent, which itself had fallen into liquidation. Instead of merely issuing proceedings for insolvent trading, we initiated a public examination of the relevant director and accounts staff to establish all the requisite elements of an insolvent trading claim, including the complete negation of a foreshadowed defence of acting honestly and reasonably. The approach yielded a favourable settlement, including a modest return to creditors, without the need to issue proceedings and avoiding what might have otherwise been an expensive and protracted piece of litigation.
Regulatory enforcement of managed investment scheme: We recently acted for a former officer of a major resort and leisure company in multiple pieces of litigation involving ASIC and the liquidators, concerning allegations of financial misconduct and breach of fiduciary duty (by allegedly assisting a major secured creditor to recoup in full their debt prior to the company’s collapse).
Oppressive conduct proceedings: We acted for the two directors of a commercial aircraft leasing company with a portfolio of aircraft worth more than $3.5 billion. They were also the ordinary shareholders. The preference shareholders brought urgent Federal Court proceedings against our clients for a breach of their directors’ duties and for ‘oppression of a minority’ relief. After two years of litigation, we were able to successfully settle the matter in its entirety.
ATO and directors’ indemnities: We are defending a director of a group of over 20 companies in liquidation, who is being sued in the Federal Court by the ATO under its statutory indemnity powers in the Corporations Act. The ATO is in turn being pursued by the liquidator for unfair preference payments in excess of $4.8 milion.
ASIC and other regulatory investigations: We regularly act for directors and financial executives in regulatory investigations, including liaising with ASIC and other prosecutors and acting in any subsequent litigation. Due to the highly confidential nature of those investigations (where confidentiality undertakings are commonplace) further details cannot be disseminated.