The BHS Group judgment introducing novel ‘misfeasance trading’ duty for company directors raises alarm bells, warns Tim Symes, Louisa Nicholson and Eugene Pekos of Stewarts
Eight years after its collapse, the British Home Stores Group (BHS Group) saga continues to generate important developments for directors of English companies.
This article examines the recent High Court judgment on claims brought by BHS Group’s liquidators against its former directors, consider the novel director’s duty to avoid ‘misfeasance trading’ as well as wrongful trading and set out some practical advice for directors of potentially insolvent companies.
In June this year, the High Court handed down an eagerly anticipated judgment on claims brought by the group’s liquidators.
The court found two of BHS Group’s former directors liable for wrongful trading, ‘misfeasance trading’, and misfeasance on other grounds. Ultimately, (at a further hearing) relief was ordered in a sum exceeding £150m.
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