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High Court finds two former directors of car dealership in Dublin (in liquidation) personally liable in the amount of €48,250.00 to former creditor of company who purchased three vehicles in the weeks leading up to the company's liquidation, on the grounds that they had been irresponsible and reckless in failing to take professional advices and/or to take measures to protect creditors or to wind up the company having regard to the financial information available at the material time.
Company law - directors' duties - alleged fraudulent and/or reckless trading - creditor's application to hold first and second respondents personally liable in sum of €48,250.00 arising from applicant's loss from its dealings with company in weeks leading up to liquidation - former car dealership in Dublin - purchase of three vehicles - whether respondents knew or ought to have known of risk to applicant's funds (transferred for purchase of vehicles) given precarious state of company's financial position at material time - financial difficulties brought to light in early 2012 - substantial borrowings with bank - second-named respondent was single largest unsecured creditor in company - conduct of respondents - payment of VAT to revenue by instalments - banking consultant engages - attempts to secure outside investor - significantly reduced salary in months leading to liquidation - acceptance of associated risk in taking applicant's money prior to registering vehicles - Companies Acts - test for reckless trading - deeming provision - acting honestly and responsibly - standard of proof required - inadequate attention to risks posed to creditors by continued trading - lack of evidence to suggest survival objectives being achieved at relevant time - failure to seek professional advices or to take steps to wind up given state of finances - objective analysis - 'honest and responsible' defence not available - respondents personally liable.
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