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Clifford Chance

Clifford Chance


An otherwise lawful dividend can be a transaction defrauding creditors

7 February 2019

The case of BTI 2014 LLC v Sequana SA [2019] EWCA Civ 112 offers a warning to directors and companies. The English Court of Appeal concluded that the payment of a lawful dividend can be susceptible to challenge under section 423 of the Insolvency Act 1986 (transactions defrauding creditors) and that directors could have a duty to have regard to the interest of creditors in declaring the dividend.

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