Readers' forum : Foreign misdemeanour

In 2001 our client invested in an Italian trading company and accepted a non-executive directorship. The investment was €4m in a combination of shares and loans although we are unsure whether the equity was subscriber shares.

He now regrets this venture because the Italian executive directors mismanaged the company with the result that significant trading losses were incurred. Further funds from this company were transferred to their other companies by way of irrecoverable loans.

Eventually a receiver was appointed and they have sued the auditors and the board of directors for continuing to trade at a loss in the knowledge that the company was insolvent.

The Italian court has awarded the receiver claims against the directors including our client whose proportion is more than €1m. However we expect that the receiver will accept a settlement of €100 000. As far as we can ascertain ...