ARY Digital UK Ltd was a television broadcaster. The company’s assets included agreements to acquire Electronic Programming Guides (“EPG”) which were required to facilitate broadcasts. Following financial difficulties the respondent, Mr Iqbal, was appointed as administrator.
The directors told Mr Iqbal that the Supplier would switch off the signal within a week due to the company non-payment of fees due under the EPG agreements. Mr Iqbal considered that the company should cease to trade and instructed agents to market the EPGs for one week. They were sold to an associated company for £40,000 plus VAT.
The court held that Mr Iqbal had placed too much reliance on the directors for the valuation, marketing and sale of the EPGs. A competent office-holder, having had time to advise the company prior to administration, should have made reasonable investigations as to the market for EPGs.
The respondent had failed to act with single-minded loyalty to the company and had also failed to take into account the best interests of creditors, and had taken account of matters that he should not have. He had breached the wider fiduciary duty concerning decision-making.
The respondent was order to pay £743,750 to the joint liquidators of the company in equitable compensation for the breaches of fiduciary duty.
(1) Richard Brewer (2) Mark Wilson (as joint liquidators of Ary Digital Uk Ltd) V Zafar Iqbal  Ewhc 182 (Ch)