The recent High Court judgment in Euro Accessories Limited  EWHC 47 (Ch) has shed some light on the interpretation of “fair value” for a compulsory transfer initiated by a...
Northampton Town FC and ‘the missing millions’ – Directors personally liable
A judgment has been obtained by Northampton Borough Council against two directors of Northampton Town Football Club, Anthony and David Cardoza. It is a stark reminder to company directors of their personal liability should they be found in breach of their fiduciary duties.
Between September 2013 and July 2014, the borough council loaned Northampton Town FC £10.25m to fund the redevelopment of their stadium and nearby land. However, a new stand was left unfinished and football club defaulted on repayments of the loan.
The borough council’s case focused on ‘circular’ payments to the Cardozas of money that was intended for the redesign of the stadium. The High Court found that the Cardozas had misused part of the loan and acted dishonestly.
Following their trial in July 2018, the defendants, who denied any wrongdoing, were found to have breached of their fiduciary duties and were, therefore, liable to compensate the council. The Court ruled that Anthony Cardoza was liable to pay £2.79m (to be reduced according to repayments already made) and that David Cardoza was liable to compensate the council the sum paid for works on his former home which were originally intended for use by the football club.
Under the terms of s.423 of the Insolvency Act 1986, the Council was also granted relief relating to the transfer of interest of domestic property by David Cardoza to his wife in an attempt to put it beyond the reach of creditors.
Following the Court’s ruling, the Leader of Northampton Borough Council accepted that, at the time the loan was made, the borough’s diligence was “found very wanting”.