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In this circumstance, the director can be liable to make a personal contribution, without limit, to the estate of the insolvent company.
If found liable for wrongful trading (section 214 Insolvency Act 1986) this liability will be ‘compensatory’ in nature.
If found guilty of fraudulent trading (section 213 Insolvency Act 1986) this liability may be punitive in nature.
[See ‘Director’, ‘Limited Liability’, ‘Wrongful Trading’ and ‘Fraudulent Trading’.]
An ‘unliquidated’ or ‘unascertained’ claim of a creditor is on which cannot be ‘admitted’ for a specific and provable amount by the officeholder.
An example is a claim for court-awarded damages in the future, which have not been finalised at the date the proof is lodged by the creditor.
The officeholder can either reject this claim (an unusual action if the claim has got merit, it is just the amount that is in doubt) or admit it for a ‘nominal amount’ (say £1), its value being uplifted as and when evidence of the actual amount is delivered by the creditor.
[See ‘Unascertained Claim’, ‘Proof of Debt’ and ‘Officeholder’.]
This is a term used in the context of UNCITRAL and the Cross Border Regulations 2006.
Usually a company can be wound up only if it is a company. This is, if it has been properly and legally incorporated and registered and abides by the relevant company laws of the jurisdiction in which it runs its business.
However, if there is property in a jurisdiction (say, a shop, a warehouse or a call centre) but the business in that place is carried out under the corporate umbrella of a company registered in another jurisdiction, a local person may not be aware the business they are contracting with is owned in another country and may attempt to ‘wind-up’ the non-company; say for non-payment of invoices, etc.
