Successful defence of £1million misfeasance claim

30 June 2023

Suky Mann has recently secured a fantastic result for a director, effectively defending the insolvency claims brought against him by an administrator for misfeasance and breach of fiduciary duties.

Suky’s astute analysis of the alleged claims allowed her to dismantle the administrator’s evidence on an allegation-by-allegation basis and advance a compelling defence that ultimately caused the claim to fall away in its entirety. 


Our client had been a director of a successful and reputable company, with a desire to enjoy an early retirement, he sold his shares in the company to an unconnected third party. Approximately 12 months after our client’s resignation, the company’s finances nose-dived, and it subsequently entered into administration. 

The administrator issued a letter before action against our client alleging that the disposition of his shares and the funding arrangements for the purchase of his shares was a deliberate attempt to extract monies from the company in circumstances where the company was already insolvent. The administrator also claimed that there was never any prospect of the funding being repaid, and the incoming director’s intentions had not been interrogated properly by our client before agreeing to sell his shares in the company. As Suky demonstrated, that could not be further from the truth. 

The administrator’s criticism of our client’s exit strategy was pleaded as a breach of his fiduciary duties and misfeasance, with the claim value amounting to almost £1million representing the consideration our client had received from the share sale. 

Our approach

It became immediately apparent to Suky that the factual circumstances leading up to the sale were at complete odds with the narrative pursued by the administrator. Despite the extensive nature of the letter before action, the allegations could not be maintained. 

Suky’s balanced and objective approach enabled her to gain a level of trust with the client quickly. This allowed her to prepare a detailed account of the facts and produce evidence substantiating our client’s defence. Suky was able to evidence that there had been no breach of duty. In fact, our client’s conduct had been exemplary. After receiving our client’s detailed defence to the claims, the administrator confirmed that the claims were being abandoned.  

Where the administrator sought to pursue our client for breach of his fiduciary duties, Suky was steadfast in rebutting the accusation and adopting a painstakingly forensic approach to undermine the claims with skill and expertise. 

Open quotation mark

“The knowledge and direction received from Suky has been second to none. In an extremely stressful period, a fantastic service was provided along with a positive end result. With no hesitation I would recommend this company.”

Our comment

It was unfortunate that the director had to fend off such enormous and potentially devastating claims due to the conduct and poor management practice of the incoming purchaser. However, this only exemplifies the importance of obtaining expert advice as soon as such claims arise.

This case serves as an important reminder to directors facing insolvency officeholder claims that while those claims may appear viable on paper, it is paramount to demonstrate the purpose and intention of any challenging transactions. 

It also demonstrates the importance of having the right people in your corner, even when the situation looks desperate. In our experience, seeking legal advice and achieving the best possible outcome is never too late.

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