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The verdict in the Farepak directors' disqualification case is now in. It has been held by Mr Justice Peter Smith that the directors did not act in an unfit manner (s.6 CDDA86) in relation to the affairs of the Farepak enterprise. Indeed the case collapsed last Wednesday at the Rolls Building.
Unsurprisingly press comment has been critical. As the Telegraph note, "Directors of Farepak such as Sir Clive Thompson former CBI president, were pursued through the courts; Business Secretary, Vince Cable’s reputation, has been questioned and the work of the Insolvency Service savaged." HBOS also come in for some criticism by the judge. The Press Association has gone as far as to say that the directors have been vindicated. Whilst one political party (the SNP) have called for an investigation into HBOS role in the affair.
The judgment of Mr Justice Peter Smith was handed down last Wednesday and will be linked from here shortly.
What does all this say about directors duties, banks as shadow directors, and the disqualification jurisdiction generally? Shortly we will be interviewing His Honour Judge Abbas Mithani QC to get his take on this landmark case. In the interim Mr Justice Peter Smith's judgment will be read very closely to see how improvements can be made to this incredibly important part of our regulatory approaches to company management.
"This is the ultimate statement of where the law on IVAs is to be found in our great common law...