Vivendi SA Centenary Holdings Iii Ltd v Richards & Ors [2013] EWHC 3006 (Ch) (09 October 2013)

Vivendi SA Centenary Holdings Iii Ltd v Richards & Ors [2013] EWHC 3006 (Ch) (09 October 2013)

Mr Bloch breached his duties as director by causing CH3 to make payments, including a dividend, when the company was insolvent or likely to become insolvent, based on unreasonable assumptions and without proper regard to the company's interests. Mr Richards was liable as a shadow director and for dishonestly assisting Mr Bloch's breaches. The dividend was unlawful, the reduction in the onerous lease provision was not justified, and the loans and investments were not in CH3's interests.

Citation
[2013] EWHC 3006 (Ch)
Parties
First Claimant: Vivendi SA; Second Claimant: Centenary Holdings III Limited; First Defendant: Murray Richards; Second Defendant: Stephen Bloch
Jurisdiction
England and Wales
Judgment Date
09 October 2013
Procedural Posture
High Court Chancery Division / Judgment
Outcome
Judgment for the claimants
Legal Topics
Breach of Director's Duties, Dishonest Assistance, Solvency, Dividend Payment, Shadow Director Liability
Company Law Insolvency Directors' Duties Breach of Director's Duties Dishonest Assistance Solvency Dividend Payment Shadow Director Liability

Case Brief

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Parties

Vivendi SA

First Claimant

Centenary Holdings III Limited

Second Claimant

Murray Richards

First Defendant

Stephen Bloch

Second Defendant

Procedural Posture

High Court Chancery Division / Judgment

Legal Issues

  1. 1 Whether Mr Bloch breached his duties as director of CH3 in causing nine payments totalling over £10 million
  2. 2 Whether Mr Richards was liable as a shadow director and for dishonestly assisting Mr Bloch's breaches
  3. 3 Whether the dividend paid by CH3 was lawful and based on distributable reserves

Ratio Decidendi

Mr Bloch breached his duties as director by causing CH3 to make payments, including a dividend, when the company was insolvent or likely to become insolvent, based on unreasonable assumptions and without proper regard to the company's interests. Mr Richards was liable as a shadow director and for dishonestly assisting Mr Bloch's breaches. The dividend was unlawful, the reduction in the onerous lease provision was not justified, and the loans and investments were not in CH3's interests.

Court Disposition

Judgment for the claimants

Orders

  • Declaration that Mr Bloch breached his duties as director of CH3
  • Declaration that Mr Richards was liable as shadow director and for dishonest assistance