Not so separate legal personality and bad debts

In the harsh economic conditions which prevail, increases in bad debts and difficulties in securing payment are common experiences for many. Financial difficulties resulting in poor payment conditions can affect any of your clients. Many legislative measures have been enacted which seek to prevent the “phoenix syndrome” but restriction and disqualification orders do not ensure your client is paid. Another phenomenon is the “scorched earth” problem identified by the McDowell Report1, where the extent of insolvency is such that the appointment of a liquidator is highly unlikely for monetary reasons, but remedies are nonetheless required. So the provisions of, inter alia, section 251 of the Companies Act, 1990 (CA,1990) are worthy of recall.