Insolvency Actions

Claims Examples Paid by Directors and Officers Liability Insurance

Insolvency Actions

The insured company provided outdoor staging services. They entered into administration following non-payment of fees on a large overseas contract. Proceedings were issued against the former directors of the company by a litigation funder, who had been assigned rights to claims in negligence by the administrators pursuant to the Insolvency Act 1986. It was alleged that each of the four directors breached their duty owed to the company pursuant to Section 174 of the Companies Act 2006. In addition, it was maintained that directors had failed to take sufficient steps to ensure or secure prompt payment from their customer, or alternatively, failed to put in place the necessary insurance to protect them from the risk of default. Defence costs and damages exceeded £1,200,000.