Facts, not director's intention, decide if payments are dividends

The Court of Appeal has overturned the earlier decision in Global Corporate Limited v Hale [2018] EWCA Civ 2618 in which it was decided that dividends paid to a director by a company with insufficient distributable profits were not unlawful despite the company being insolvent at the time.

Powerstation UK Limited (the company) started to encounter financial difficulties in around 2008 and entered liquidation in 2015.

The company's claim against the director was purchased by Global Corporate Limited from the company's liquidator.