Judgment in First Independent Factors & Finance
Limited v Ian Josef Mountford was given by HHJ Lewison on
23 April 2008. It concerns the familiar situation where a
company is in liquidation and another company subsequently
trades with a similar name and at least one common
director.
Sections 216 & 217 of the Insolvency Act 1986 restrict
the activity of directors in such situations. Their operation
is complex. Broadly, the law applies where a director of the
original insolvent company ("Oldco") becomes involved
in the management of another company ("Newco") within
5 years of the liquidation of Oldco, and Newco trades using a
name which is "so similar... as to suggest an
association" with Oldco. There are prescribed
"excepted cases" (which are beyond the scope of this
article), but if those do not apply then the common director is
guilty of a criminal offence and can be personally liable for
the
