Claims against Directors
Whilst it is true that directors of limited companies normally benefit from a limited liability status, there are circumstances where that protection can be removed and directors may become subject to personal claims against them - either following the insolvency of a company or arising from general breaches of their duties.
In such circumstances it is vitally important to take legal advice in order to protect your position. The law relating to personal claims against directors can be complex, but with proper advice, many of those claims can be defeated. Failure to deal with such claims could result in proceedings being issued and Court orders being made against you personally, ultimately leading to a loss of your personal property and perhaps even bankruptcy.
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Personal claims against directors come from all different sources, including government, creditors, Liquidators or Administrators, co-Shareholders or even the company itself. Please see our Shareholder and Director Advice page for more information on company and shareholder claims. However, experience tells us that the two biggest factors for a director to consider, when assessing such risk and an claims threatened or received, are as follows:
At Francis Wilks and Jones we have considerable experience in advising on and assisting with the above matters and we would be more than happy to discuss any of the above on an initial no obligation basis. Please feel free to contact us if you have any such queries.
I contacted Francis Wilks & Jones with regard to a client of mine who had little means and who was facing difficulties with his co-shareholders, who he alleged were drawing monies out of the company without my client’s authority and further limiting any payments to my client, who was also a director. At the time my client was facing retirement with no prospect of obtaining any return for his shareholding.
However, I found Mr Downie of Francis Wilks & jones of great assistance in understanding all of the companies’ financial information going back over a period of 20 years and together we were able to negotiate and extract an outcome for my client that was beyond his initial expectations financially and additionally he was prepared to enter into a funding arrangement that meant that my client would not have to pay any associated legal fees. That aside, I found Francis Wilks & Jones very professional, they always responded proactively and I always felt we had a confident and knowledgeable personnel supporting our needs. I would definitely refer any such similar matter to them again, solely in my client’s interests.
I was introduced to Francis Wilks & Jones with little or no expectation as to whether they could assist me. I had spent two decades with my co-shareholder and co-director running a small company that we developed together, but it felt in latter years that my income was not growing with the company as opposed to my co-shareholder who appeared to be doing very well. As time went by I was being paid a pittance and was struggling to work out how I could leave the business and sell my shares.
I was introduced to Francis Wilks & Jones, a firm in Central London, who agreed to take my instruction on the basis of a funding arrangement which meant that they were only paid if my claim was successful. I found them very supportive and friendly, with partner-led involvement and I was always able to speak to the partner dealing with my matter and who managed it very professionally through to completion. I would recommend Francis Wilks & Jones to anyone facing a similar situation.