The Amount of The Award
The Court has wide discretion over the contribution that it can require. Traditionally this has been compensatory, rather than punitive. The starting point for assessing the appropriate amount was the difference between the net assets of the company at the date that the directors should not have traded beyond, and the net assets at the date of liquidation.
The Court however has wide discretion, and may award just a percentage of this. It awarded 70% of the drop in net assets in Re Brian D Pierson (Contractors) Ltd BCC 903. This was on the basis of the judge’s "guesstimate" that 70% of the drop in net assets was due to the actions of the directors, and 30% could be attributed to extraneous causes.
Read more about this topic: Wrongful Trading
Famous quotes containing the words amount and/or award:
“Is this not true—That in proportion to the value of their estates the extremely wealthy pay far less taxes than those of moderate means? Compare the amount paid by millionaires with the amount paid by ordinary citizens. I believe that in proportion to their estates they pay less than half as much as ordinary citizens, whereas they ought to pay more.”
—Rutherford Birchard Hayes (1822–1893)
“The award of a pure gold medal for poetry would flatter the recipient unduly: no poem ever attains such carat purity.”
—Robert Graves (1895–1985)