ABSTRACT
The previous chapter considered the ability of the officeholder to swell the assets available to the creditors by clawing back into the estate assets previously transferred by the insolvent. This chapter considers the ability of the liquidator of an insolvent company to impose liability to contribute to the assets of the insolvent on those controlling the company whose actions have contributed to the loss of the creditors. The shareholders of a company with limited liability will only be liable to contribute to the assets available for the repayment of creditors up to the amount which they have agreed to pay for their shares. The insolvency legislation contains provisions intended to prevent those controlling businesses from unjustifiably sheltering behind the protection of limited liability. The insolvency legislation provides the liquidator with an easier method of bringing claims which were already vested in the company at the start of the liquidation where the defendants have been responsible for the management of the company.2 The legislation also provides grounds for action against those guilty of allowing the company to continue incurring credit at a time when it should have stopped trading.3
