Vol 21 (2024) - Issue 4

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Supreme Court Strikes out Quincecare Claim and Gives Further Clarity on Claims by Distressed Companies against Directors: Stanford International Bank Ltd v HSBC Bank PLC

Synopsis
Key takeaways:
– At least where unlawful preference rules are not engaged, loss to the company is a necessary element of the company’s claims against its directors for misappropriation of company assets.
– Where other remedies are not available to recover sums paid out to third parties in breach of duty, do not assume that recourse will lie against defaulting directors to increase the amounts distributable upon liquidation.
– Interesting (obiter) commentary, suggesting that (in principle) the Quincecare duty covers payments made to creditors where a company is in a situation of ‘hopeless insolvency’, just as much as any other kind of misappropriation.