Director’s optimistic view may have been justified

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A director who took an optimistic view of the company’s finances might not be in breach of a duty to creditors provided that view was based on credible evidence.

The administrators of E-Clear (UK) applied to court for the recovery of payments amounting to £4m, which they alleged a director of the company had caused the company to make in breach of his fiduciary duties. It was further alleged that the payments constituted preferences pursuant to section 239 of the Insolvency Act 1986. The director argued that the payments had been made when the company was solvent and in repayment of various loans he had made to it…

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