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Legal updates: April 2019

In this month's legal updates, experts at law firm Gateley plc examine a number of accounting cases including the Court of Appeal ruling in BTI 2014 LLC v Sequana SA & ors on dividend payments, directors’ duties and defrauding creditors, HMRC preferred creditor status and share sale agreements under bad leaver provisions

Case: dividends, directors' duties and defrauding creditors

The Court of Appeal has made an important ruling relating to companies in financial difficulties. BTI 2014 LLC v Sequana SA & ors [2019] EWCA Civ 112 dealt with various issues but, in particular, considered the point at which the directors' duty to protect creditors' interests is engaged and whether dividends could amount to a transaction at an undervalue.

The facts

The case arose from two dividends totalling €578m (£495m) paid by Arjo Wiggins Appleton Limited (Arjo Wiggins Appleton) to its parent company Sequana SA (Sequana).

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