Breaches of Director Duties: Strategy and resolutions
As often occurs, times can be tough. The business is not governed as well as it should have been. Decisions are made. Liquidators, Shareholders (and sometimes creditors) can pursue directors for their breaches of director duty.
When liquidators are involved, they can freeze assets of directors and pursue them for all of the losses of the company (creditors) and in some cases, they can recover the costs of the liquidator and lawyers.
What are your options in these situations? Will the liquidator actually file proceedings at the High Court or is it just a routine ‘shakedown’?
The liquidator may also demand that you repay all money you have received from the Company. You can consider that this is payment for your services. They may consider it an overdrawn current account (a loan) and repayable on demand. What are your rights and obligations in these circumstances?
Being a business owner is not easy. There is always sleepless night. Only another business owner can understand the impact it has on your life.
Liquidators will not give you credit for that.
In my experience, resolving these disputes requires an in-depth understanding of the law that governs companies and directors but it also requires an in-depth understanding of the different methodologies to negotiate with liquidators and resolve disputes.
With this understanding, I am able to assist directors to resolve the dispute quickly so that they can continue without the stress and cost of fighting with a liquidator.
However, in some cases that this is not possible. In these cases, I assist our clients to navigate the Court process to obtain a result.
Often, liquidators overstate their position and the law. Liquidators often lose at Court. It is a matter of picking ones battles.
In my expertise, the biggest mistake directors make in disputes with liquidators is not obtaining professional advice early.
The consequences are that the parties can become entrenched in their positions and have unrealistic expectations. They have had time to “justify” their approach to the dispute.
Through acting on many of these cases, I have learnt that it is critical to:
- Get informed quickly; and
- Act fairly but firmly in the pursuit of resolving the dispute.
By doing this you demonstrate that:
- You are well advised of your position; and
- You are willing to fight for what is fair, and have in fact obtained expert representation to do so.
You must demonstrate that you will do what is required to bring this matter to a head and resolve it one way or the other.
If you want practical and expert advice that can actually help you to resolve this matter, you’re in the right place.
We can help you resolve the dispute so you can reduce your stress and uncertainty and focus on the things that matter.
The next step is to book FREE 30-minute Legal Consultation. At this Consultation you will:
- Get a real appraisal of your current situation;
- Identify possible issues to consider; and
- Develop strategy to resolve the claim.
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