Unfairpak can confirm that this case has been referred to in the Defendant’s Skeleton Arguments.
Directors’ Duties In the matter of Uno plc and World of Leather plc .
In this directors’ disqualification case it was accepted by the defendant directors that they were aware that the Group of Companies was in financial difficulties; that they continued to take deposits from cash paying customers; that they failed to segregate those deposits and that they knew that there was a risk that if the Group went into formal insolvency before customers received delivery then the customers would be unsecured creditors and would not receive the goods ordered or the refund of their deposits.
The Court agreed, however, with the submission made on behalf of the defendant director that their conduct did not amount to unfit conduct warranting a Disqualification Order. The reason for that was that the Secretary of State had overlooked the all important concession that, at all material times, the defendant directors had reasonable grounds for believing that insolvent liquidation could be avoided.
The Judge found that the defendant directors could not be criticised for their conduct. His detailed summary of the directors’ actions in the case showed that:-
1. They constantly reviewed the Company’s options.
2. They regularly received and considered updated financial infor mation.
3. They regularly took professional advice from solicitors and accountancy experts.
4. They kept their major creditors and suppliers fully informed of the actions they were taking.
5. They had gone out of their way to try and secure a solution which had reasonable prospects of succeeding and which, if achieved, would have satisfied all of the Group’s creditors not least its cash paying customers; and
6. They minuted key decisions taken and the reasons for them.