Insolvency: Protecting Directors’ Assets
Insolvency - how to Protect Directors’ Assets
Directors who have invested in a business that becomes insolvent or faces an insolvency action are liable for the failing financial health of the business. This means that if a troubled business is sold, in whole or in part, then creditors of the business will need to be paid first, before any residual assets can be shared between the directors or owners of the business.
Often, directors many lose all their original personal investment as well as the prospect of future dividends and their financial position can become very unstable. Some may face personal bankruptcy. Directors who disagree with the Winding-Up Petition of the business can litigate against other directors who recommend it.
Where the action is involuntary, with a forced and pending insolvency action for example, then speaking to one of our solicitors can give you a complete overview of your financial liabilities and the impact of proceedings and personal insolvency or personal bankruptcy.
We can advise directors on how to limit or avoid personal liability relating to their actions
– as long as early advice is sought from us.
