William Robert Eskdale and Michael William Eskdale, directors of insolvent Northland freight-forwarder Esko Group Ltd, were held jointly liable to pay $246,700 for trading recklessly, with William Eskdale ordered to pay a further $145,600 which included personal drawings taken from the company.
Fellow director James Johnston did a deal with Esko liquidator, settling out of court and giving evidence of the Eskdales siphoning money out of Esko to prop up their related trucking business, Eskdale Freight Ltd.
There was evidence Esko was insolvent within a year of its 2015 incorporation. Inland Revenue put the company into liquidation in 2017 on tax debts totalling $458,000. Mr Johnston told the liquidator of Esko cash being poured into Eskdale Freight. Mr Johnston was not an Eskdale Freight shareholder; the Eskdales were. Eskdale Freight, which operated out of Port Whangarei, was wound up insolvent in 2016 with all its serviceable trucks repossessed.
Esko’s liquidator said its directors never had any reasonable prospects of seeing repayment of money shifted across to Eskdale Freight. The Eskdales were held liable for recklessly trading Esko in breach of the Companies Act; failing to act in good faith and for using company funds to pay creditors of their other business. William Eskdale was further held liable to repay $92,000 being cash taken from Esko to pay personal debts.
Esko Group Ltd v. Eskdale – High Court (17.07.19)
19.128