Misfeasance - winding up, Business Law and Ethics

Assignment Help:

Misfeasance:

Under s.324, misfeasance proceedings may be instituted against a director, promoter, manager, liquidator or "officer" (including an auditor) of a company in liquidation either to recover the company's property from him or to claim compensation for the loss to the company caused by his misfeasance.

The most obvious case of misfeasance is where a director or other officer of the company is found to have misappropriated property of the company.  He can be compelled by misfeasance proceedings to return it.  His conduct may also be criminal misappropriation of property for which he can be prosecuted.

The other type of misfeasance case is where the company has suffered loss owing to the incompetence or neglect of a director or other officer.  It is not however easy to establish that there has been breach of a fiduciary duty such that an order should be made (on grounds of misfeasance) for payment of compensation.  For some lesser default the liquidator could bring an action for negligence.

In the context of misfeasance proceedings an auditor is exceptionally an "officer" who can be liable: he is not an "officer" in any other situation since he has no management functions.

A receiver is not an "officer" who can be held liable (if the company later goes into liquidation) for misfeasance.

                                      Case. RE B JOHNSON & JOHNSON CO (BUILDERS) (1955)

Misfeasance proceeds were brought against a receiver on the ground that he had in his management of the company's business taken decisions which were "detrimental from the company's point of view", eg. closing down parts of its business. 

Held:

A receiver is a representative of the secured creditors by or for whom he is appointed.  He is not an officer of the company who can be liable for misfeasance. If however a receiver does not act bona fide (ie. honestly) the company might have a claim against him but not misfeasance.


Related Discussions:- Misfeasance - winding up

Duties of auditors, DUTIES OF AUDITORS: The duties of auditors are exp...

DUTIES OF AUDITORS: The duties of auditors are explained in the following cases. 1. RE: KINGSTON COTTON MILL CO. (1896)(CHANCERY) For some years before a company was wou

Offer and iit , difference b/w offer and ITT AND PAKISTANI CASES OF AUCTION...

difference b/w offer and ITT AND PAKISTANI CASES OF AUCTION ,ADVERTISMENT,TENDERS AND DISPLAY OF GOODS?

Bluebook format - located the resource, Explain how you located the resourc...

Explain how you located the resource that addresses the question and cite that resource in proper Bluebook format: Spend & Save is claiming that our client lacks standing to s

Constitutional law, Write one term paper (20 to 25 typed pages of actual te...

Write one term paper (20 to 25 typed pages of actual text). **The paper must be on a word, phrase, or clause within the U.S. Constitution. Ex. Establishment Clause, Free Exercise

Regulations regarding hazardous substances, REGULATIONS REGARDING HAZARDOUS...

REGULATIONS REGARDING HAZARDOUS SUBSTANCES A hazardous substance has the potential to harm. It may cause harm to human beings, other living creatures, plants, microorganisms, p

Joint negotiating panel, QUESTION 1 (i) What are closed shop agreements...

QUESTION 1 (i) What are closed shop agreements and whether there are any legal remedies if such agreements do exist? (ii) Industrial relations are the relationships between

Assets in the possession of creditors, ASSETS IN THE POSSESSION OF CREDITOR...

ASSETS IN THE POSSESSION OF CREDITORS:  If the creditor has seized assets in the course of executing a judgement for debt against the company and at the commencement of the wi

Owning of property, Owning of Property:                       Under Ac...

Owning of Property:                       Under Act of a registered company, as a person, has power to own movable and immovable property. It can actually do so if it can affo

Rights of guarantor against creditor, Rights of Guarantor Against Creditor ...

Rights of Guarantor Against Creditor Consequently the rights of the guarantor are: like (a) Further at any time after that the guaranteed debt such has become due and such prev

Exceptions for nemo dat quod non habet, Exceptions for Nemo Dat Quod Non Ha...

Exceptions for Nemo Dat Quod Non Habet However the "nemo dat" rule is subject for the following exceptions such are provided by the Act: like; (a) Estoppel With S.23

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd