Gerry Bredin Hardware Ltd (in liquidation) -v- Companies Acts [2011] IEHC 442 (29 November 2011)

Gerry Bredin Hardware Ltd (in liquidation) -v- Companies Acts [2011] IEHC 442 (29 November 2011)

The company is the owner and entitled to possession of the insurance money, subject to legitimate claims; the accountant's apportionment was flawed and invalid; directors' interception and diversion of funds was impermissible; the directors' claim should have been made properly recognising the company's insolvency.

Citation
[2011] IEHC 442
Parties
Applicant: Gerry Bredin Hardware Limited (In Liquidation); Respondents: Gerry and Ailish Bredin
Jurisdiction
Ireland
Judgment Date
29 November 2011
Procedural Posture
Company Law / Insolvency / Trial on Discrete Issue of Ownership of Insurance Proceeds
Outcome
The €700,000 insurance settlement is the property of the company, subject to legitimate claims.
Legal Topics
Fraudulent Preference, Ownership of Insurance Proceeds, Directors' Duties, Apportionment of Insurance Money, Liquidation
Company Law Insolvency Insurance Law Fraudulent Preference Ownership of Insurance Proceeds Directors' Duties Apportionment of Insurance Money Liquidation

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Parties

Gerry Bredin Hardware Limited (In Liquidation)

Applicant

Gerry and Ailish Bredin

Respondents

Procedural Posture

Company Law / Insolvency / Trial on Discrete Issue of Ownership of Insurance Proceeds

Legal Issues

  1. 1 Whether the €700,000 insurance settlement is the property of the company or the directors
  2. 2 Whether the payment to directors constituted a fraudulent preference under s.286 of the Companies Act 1963

Ratio Decidendi

The company is the owner and entitled to possession of the insurance money, subject to legitimate claims; the accountant's apportionment was flawed and invalid; directors' interception and diversion of funds was impermissible; the directors' claim should have been made properly recognising the company's insolvency.

Court Disposition

The €700,000 insurance settlement is the property of the company, subject to legitimate claims.

Orders

  • Directors are not entitled to the €700,000; money must be treated as company property; directors may still put forward a claim in proper form.