ABSTRACT
This chapter engages in an analysis of the fraudulent trading provision, s 213 of the Insolvency Act 1986 and how it is applied. First, it identifies the central elements of the section and then it pinpoints who may apply for relief under s 213, followed by a consideration of the applications that can be made and what they might entail as well as discussion concerning against whom such applications can be brought. Applications may be made against directors but also claims can be made against others who may be involved in some way in the fraudulent trading. The chapter then analyses, apart from an examination of the need for a successful claimant to establish intent to defraud or acting for any fraudulent purpose, something left to Chapter 7, the conditions that have to be established for a successful claim. This is followed by a consideration of what orders might be made, whether defendants can be relieved from liability and what happens to the proceeds of any successful claim. The chapter also contains a consideration of criminal proceedings for breach of the fraudulent trading provision in s 993 of the Companies Act 2006, noting that penalties can be quite severe.
