The client, a former director, faces a claim from the company’s liquidators for alleged unlawful dividends and repayment of an overdrawn director’s loan account. A without prejudice offer was made by the liquidators, with a deadline. The client acknowledged the liability and confirmed his ability to pay via pension drawdown but expressed concern over an unacknowledged payment made to the company.
The client sought advice on the fairness of the settlement offer and whether a reduced figure could be proposed. Counsel advised that the offer was reasonable and reflected a willingness to negotiate, cautioning against pushing the liquidators further. A revised proposal was discussed, structured as a upfront payment followed by 15 monthly instalments.
Counsel advised that the revised offer could be presented as a final settlement, balancing the client’s financial position with the need to resolve the matter efficiently. A short letter will be drafted to communicate the offer and seek closure. The client understood the risks and agreed to proceed on this basis.
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