NSW case confirms when a de facto director can be held liable for insolvent trading

Hannah Griffiths and Arvand Ghazizadeh of Pinsent Masons summarise a recent Supreme Court of New South Wales decision holding a de facto director liable for insolvent trading losses under sections 588G and 588M, with the judgment also clarifying that unsecured status is assessed at the time of the 588M claim and underscoring the need for liquidators to identify de facto directors, prove insolvency objectively, and carefully check surrendered security interests.

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