Insurance company suffered unexpected losses. Directors commissioned a report as to company’s solvency, and decided to continue trading on basis of report until after six months it became clear company was insolvent. Held:
· Directors were not liable for wrongful trading during six month period.
· Ceasing to trade and liquidating too soon can be “stigmatised as the coward’s way out”
Ø Thus would be wrong to judge directors based on hindsight