Reply To: Developers filing for protection from creditors

#79475
Anonymous
Participant

Many thanks for all your replies on this.
I received a pm from Drakan, one of the forum lawyer-contributors (what a guy – he’s actually on holiday at the moment!) with a nice clear cut response which I’m cut and pasting here for other members’ interest.

Drakan:

Well as you can imagine then why incorporate a specific company for every development if the “responsibility follows the administrators” to the parent company ?

Obviously not. They are limited liability companies. The responsibility is always limited to the companies assets and rights. Unless the administrators are incurred in a crime -and you will have the huge onus of proving it- the responsibility is “contained and limited to” that company.

Much like in a ship you have different interlocking hulls so when there is a hull-breach, you can contain and limit the extent of the damage. It’s the same principle only that instead of hulls we are talking of companies.
Hope that helps.

Many thanks for clearing that one up Drakan – enjoy the rest of your holiday. 😉