Re Patrick and Lyon [1933] Ch 786

Court: High Court (Chancery Division)

Facts: Creditors alleged that a director delayed liquidation to secure assets for personal debentures, seeking to hold the director personally liable for fraudulent trading.

Issue: Can the corporate veil be pierced to hold a director personally liable for defrauding creditors based on delays in liquidation?

Held: Claim dismissed. The court found insufficient evidence of fraudulent intent, ruling that the delay was for clearing stock rather than defrauding creditors.

Key Judicial Statement: The court stated, "Actual dishonesty and real moral blame are required to establish fraudulent intent."

💡 Leveluplaw: To pierce the corporate veil for fraudulent trading, there must be clear evidence of actual dishonesty and moral blame, not just procedural delays.