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Director not entitled to pay off after winding up petition presented

The High Court has declared that a settlement agreement made between a company and its former director before it was compulsorily wound up was void and therefore he was not entitled to the payments under it.

Any disposition of the company's property (including money) made after the commencement of the winding up is void, unless the court orders otherwise, to ensure that it is available for distributing to the creditors. In this case, between the presentation of a winding up petition against it and the making of its winding up order, the company removed a director from office and entered into a settlement agreement to regulate various financial claims between them. The liquidators applied to court for a declaration that the director had misapplied company monies and that certain payments made by the company to the director, subject to the agreement, were void.

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