Vol 17 (2020) - Issue 1

Article preview

Burnden Holdings (UK) Ltd (in liquidation) v Fielding [2019] EWHC 1566 (Ch)

Synopsis

In Burnden Holdings (UK) Ltd v Fielding in what was a pragmatic and commercial judgment, the High Court provided guidance on a number of important legal issues including directors’ duties, unlawful distributions and transactions defrauding creditors. In dismissing all claims, the Court found, amongst other matters, that (i) directors who reasonably rely on properly prepared financial accounts will not be found to have made an unlawful distribution, (ii) the payment of a dividend can be a transaction at an undervalue (but the granting of security over existing indebtedness cannot be), and (iii) section 1157 relief is not precluded in relation to unlawful distributions in circumstances where a company subsequently goes into liquidation.