Director Misconduct & Misappropriation Expert Witness UK
Director misconduct goes beyond ordinary employee fraud - directors owe fiduciary duties to the company under the Companies Act 2006, including duties to act in good faith (s172), avoid conflicts of interest (s175), and declare interests in transactions (s177). Breach of these duties can be pursued as misfeasance under the Insolvency Act 1986 s212, unfair prejudice petitions under s994, or derivative claims.
Forensic accountants analyse financial records to identify and quantify breaches - unauthorised payments to the director, related-party transactions not disclosed, diversion of company opportunities, and misappropriation of company funds in the lead-up to insolvency. The expert reconstructs normalised financial position and quantifies the loss to the company and its creditors.
Disqualification proceedings may follow where a director's conduct makes them unfit to manage a company. Expert accounting evidence supports the Secretary of State's application by demonstrating the financial impact of the director's misconduct and the inadequacy of financial controls.
Frequently Asked Questions
How does employee fraud differ from director misconduct?
Director misconduct goes beyond employee fraud - directors owe fiduciary duties to the company under Companies Act 2006, including duties to act in good faith (s172), avoid conflicts of interest (s175), and declare interests in transactions (s177). Breach of these duties can be pursued as misfeasance, unfair prejudice, or derivative claims - in addition to fraud claims. Forensic accountants analyse the financial records to identify and quantify breaches.
What is a misfeasance claim against a director?
A misfeasance claim under Insolvency Act 1986 s212 allows the liquidator (or creditors) to seek repayment of money misapplied or retained by a director. It is often used in insolvency proceedings where a director has taken funds from the company in the lead-up to insolvency. Expert witnesses analyse the transactions and quantify the misfeasance.
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