26 September 2024
Creditors successful in direct claims for compensation against directors
In 2023 the Supreme Court confirmed in the Mainzeal decision that section 301 of the Companies Act could be used for direct claims by creditors against directors for losses suffered as a result of breach of director duties.
This was recently used by a creditor in Boaden v Mahoney [2024] NZHC 2783. The High Court ordered the director of Civil Underground Limited (in liquidation) to pay compensation of $89,400 to the creditor under section 301 for direct losses suffered as a result of the director’s breach of the reckless trading duty (section 135) and the duty in relation to incurring obligations (section 136).
Directors should be aware that…
