Re Produce Marketing Consortium Ltd [1989] BCLC 520

Court: High Court

Facts: Liquidators sued directors for wrongful trading after the company’s financial troubles worsened. Directors lacked full accounts but were aware of the company’s financial position.

Issue: Can directors be held liable for wrongful trading if they did not have access to full accounts but were generally aware of the company's financial position?

Held: Directors held liable. The court found directors should have been aware that liquidation was inevitable, emphasizing that reliance on lack of formal accounts was insufficient.

Key Judicial Statement: The court noted, "Directors are liable for wrongful trading based on what they should reasonably ascertain about the company’s financial status."

💡 Leveluplaw: Directors must maintain proactive financial oversight and cannot avoid liability by claiming ignorance of the company’s financial status.