The recent announcement that the Australian parent company of Greensill Capital is under investigation for insolvent trading highlights the potential liabilities faced by directors of failed companies.
Greensill Capital Pty Ltd (Pty Ltd) went into administration owing almost $4.9bn. As well as a possible insolvent trading claim, the administrators identified various transactions that require investigation.
The potential proceedings against Pty Ltd directors are likely to be based on insolvent trading, under section 588G of Australia's Corporations Act (the Act). Liquidators have enjoyed good success rates under this long-established, Australian basis for liability.<...