Directors duties - more on Regal Hastings

This post will cover the breaches of directors' duties in Regal Hastings.

The company had set up a subsidiary to undertake a project. However, the directors of the holding company later found that the subsidiary did not have enough capital to undertake the project. The holding company also did not have enough additional funds to inject into the subsidiary. The holding company directors then decided to invest personally in the subsidiary. Later, these investments paid off as these directors made a good profit.

A court later found that the directors had breached their duty to the holding company. They could have injected their investment into the holding company which could then increase the capital of the subsidiary. Their method had bypassed the holding company to which they owed fiduciary duties, and thus deprived the holding company of the potential profits.