Parliament has decided that Carillion’s board of directors were culpable for its failure. MP’s are calling for the disqualification of the board from acting as directors in the future.
The directors of Carillion are accused of driving the company off a cliff in a dash for cash and of acting with greed and hubris. They have, of course, been paid extremely well to oversee the demise of this corporate giant and will have questions to answer regarding its failure.
The BBC reports that the Company sank under a £1.5billion debt pile – the consequences of this for those who contracted with or worked for Carillion are likely to be far reaching and in some cases utterly devastating.
It is unlikely that the full deficiency will be recovered or that any real dent will be made but those who drove the company to its demise may be called upon to pay money in for the benefit of creditors. If they had Directors & Officers insurance, the sums recoverable could be substantial provided the potential claims are investigated properly and promptly.
In 2016 (the most recently available statistics) there were over 16,000 company insolvencies. Most will be nothing like Carillion but the directors of each of those companies will have had fiduciary responsibilities and we never cease to be amazed at the regularity with which those duties are breached when a company is in trouble. The most common breach is a director using the company’s money as though it is their own or taking dividends when there aren’t profits. In each of these scenarios there is a prospect of making recoveries from those directors.
It used to be that creditors could not get very excited about potential actions against directors because those actions would have to be taken by a liquidator and all or almost all of the money recovered would be used to pay professional fees but the world is changing. These days liquidators are less keen to take action because of the cost and risk of doing so and the scrutiny applied to their fees and the law has changed to allow them to sell these claims. Imagine that – you are a creditor of a company and might be able to purchase a right that enables you to recover the money that you are owed (or at least some of it) from the director who put you in that position.
We at Isadore Goldman are experts in recovering money from directors who have breached their duties and disregarded their responsibilities. We have acted for liquidators in many successful claims and know how to bring these claims – we have adapted to the changes in the law and are now looking to pursue recoveries from directors as a joint venture with creditors who have lost money (no win no fee is the norm for this type of work).
If you are owed money by an insolvent company and you believe that there has been wrongdoing then get in touch with us on 0207 353 1000 and be put through to one of our expert solicitors. Alternatively email email@example.com with your contact details and we will arrange for you to be called back. There is no charge for this initial contact.
Disclaimer: this article is not to be relied upon as legal advice. The circumstances of each case differ and legal advice specific to the individual case should always be sought.
We are delighted with our write up in both Chambers & Partners and the Legal 500 this year: https://t.co/KVbJmzcAdd.21st Oct 2019 16:33:29
Congratulations to associate Sian Leonard who won the Rising Star award at the Insolvency Practitioners Association awards last week30th Sep 2019 10:15:18