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Tue 1st December 2009
Director personally responsible for paying a company debt

The director of a company in liquidation has been held to be personally responsible for some of its debts.

The company had entered into a contract with a supplier to provide it with meat products. At first the supplier addressed its invoices to the company.

Later, however, the supplier suspected that the company was getting into financial difficulties and started addressing invoices personally to one of the directors.

The company then went into liquidation and so the supplier took action against the director to recover money owed.

It submitted that it had told the director at the time that it was no longer prepared to invoice the company but would only supply products on the basis that it invoiced him personally. It said it had confirmed its position both by letter and in a telephone conversation.

The director claimed that the supplier had merely changed the name on the invoice to avoid confusion with another of its customers. He said he had never been told that he was being invoiced personally.

The court held that on the basis of the available evidence, the supplier's version of events was more likely to be correct. The director was therefore personally liable to pay the outstanding balance on the invoices.

Please contact our Commercial Team on 01234 400000 if you would like more information about contractual liability and directors' duties or email gdannan@pwhmllp.com or kbagnell@pwhmllp.com .