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

What are types of segments required for decision, What are types of segment...

What are types of segments required for decision? A judge’s decision is made up of two segments, which are given below: a. Obiter dicta: Things said through the way on

Independent research into a particular aspect of law, The purpose of the as...

The purpose of the assignment is to allow you to undertake independent research into a particular aspect of law, to reflect on and consider particular legal issues and to apply you

Experience law, Experience Law This is a law of marketing beginning tha...

Experience Law This is a law of marketing beginning that the unit cost of value added to a standard goods, calculated in constant currency, declines by a constant percentage ea

Qualified acceptance, Qualified Acceptance It might be as the drawee is ...

Qualified Acceptance It might be as the drawee is prepared for accept the bill since only subject to some adjustment. Any type of acceptance which varies the effect of such a bi

Internal and external environment, This project requires you to choose an o...

This project requires you to choose an organisation of your own choice and discuss on the following with respect to your chosen organisation: External Environment Mega

Domestic agency of necessity, Domestic Agency of Necessity However a m...

Domestic Agency of Necessity However a married woman that has been actually or constructively deserted through her husband has authority on common law to take necessities at c

What is policy clustering, What is Policy Clustering Adoption of polici...

What is Policy Clustering Adoption of policies is motivated by the observation that nation-states, or some other jurisdictional unit, choose similar institutions within a fairl

What are the types of international law, What are the types of internationa...

What are the types of international law? Two main types of international laws are there, it is public international law and private international law. Public law is law th

Registration, Registration:            Whether the aforesaid documents...

Registration:            Whether the aforesaid documents are correctly prepared in accordance with the provisions of the Companies Act they are registered, the registrar grant

Acceptance - element of contract, Acceptance - Element of Contract Howev...

Acceptance - Element of Contract However this is the external manifestation about assent through the offeree.  Regarding to acceptance an agreement comes with existence between

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