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Liquidation while current legal action against your company.

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  • Liquidation while current legal action against your company.

    Can a company make an application to wind up the company while knowing that there is current legal action against them for instance ( Professional negligence )

    The company in question was made aware that legal action would be taken against them mid 2013 and were brought into legal action (jan 2014). The company later had only recently satisfied securities over the the company in the £millions

    It seems that they paid out dividends to the shareholders in the £Millions and now that the court action against them is getting very close the company dealing with the winding up state that they have no money to pay out any such claim against them if it was successful.

    My question is.

    Should this company have been able to pay out the dividends to their shareholders while know that there was a potential six figure sum claim against their company for Pro Negligence

    I jhave very little knowledge of the process of winding up a company but logically it just doesnt sound right that while aware of the claim against them they paid out to shareholders first.

    Any advice?

    02 Dec 2014 Resolutions
    • Extraordinary resolution to wind up on 2014-11-21
    • Extraordinary resolution to wind up on 2014-11-21
    30 Oct 2014 Registered office address changed from.............................................. ...... to .................................................. ......... on 30 October 2014 View PDF (1 page)
    25 Sep 2014 Annual return made up to 28 March 2014 with full list of shareholders
    Statement of capital on 2014-09-25
    • GBP 4,550,706
    30 Jul 2014 Compulsory strike-off action has been discontinued View PDF (1 page)
    29 Jul 2014 Total exemption small company accounts made up to 25 May 2013 View PDF (6 pages)
    30 May 2014 First Gazette notice for compulsory strike-off View PDF (1 page)
    14 Mar 2014 Section 519 View PDF (1 page)
    06 Mar 2014 Auditor's resignation View PDF (1 page)
    17 Jan 2014 Appointment of .................................................. ...................... as a director
    20 Dec 2013 Satisfaction of charge 2 in full View PDF (4 pages)
    20 Dec 2013 Satisfaction of charge 3 in full View PDF (4 pages)
    20 Dec 2013 Satisfaction of charge 1 in full View PDF (4 pages)
    They are now in liquidation
    Tags: None

  • #2
    Re: Liquidation while current legal action against your company.

    Regardless of the winding up I would expect the company to hold professional indemnity insurance which should cover any court awarded losses (as long as policy conditions have been complied with)

    Comment

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