This article is for Irish company directors and business owners dealing with a former director who has taken company property, clients, or confidential information.
If you're trying to recover misappropriated assets or wondering what legal options you have against a former director who breached their duties, this guide covers how to trace company assets, what court orders are available (including freezing orders and constructive trusts), and how to pursue both asset recovery and compensation claims.
Key Takeaways
• Directors remain personally liable for asset misappropriation committed during their tenure, even years after resignation.
• Gather and preserve all documentary evidence before contacting the former director, as assets can move quickly once they know.
• Courts can impose constructive trusts, meaning legal ownership of misappropriated assets never transferred regardless of subsequent transactions.
• Apply for freezing orders urgently if assets may be dissipated, requiring proof of a good case and real dissipation risk.
• Former directors cannot justify taking company property to offset unpaid salary or loans; these must be pursued through courts.
Laura Ryan is a practising Barrister at the Bar of Ireland. She graduated from the Honourable Society of King’s Inns in 2024, having previously qualified and practised as a Chartered Accountant in a big four accounting firm.
Can a former director be held liable for taking company property after they've resigned?
Yes, directors remain liable after resignation for breaches committed during their time in office. If a director diverted business opportunities, took confidential data, or retained company assets while still in post, the company can pursue them even years after they left.
What counts as a company asset that a director cannot take?
Company assets include both physical property like equipment, vehicles, stock and cash, as well as intangible property such as client lists, intellectual property, confidential business information, and business opportunities. If a former director set up a competing business using contacts, data, or know-how acquired through their role, that constitutes misappropriation of a company asset.
What is a constructive trust and how does it help recover assets?
A constructive trust is a court-imposed declaration that a former director holds misappropriated assets on trust for the company, meaning legal ownership never actually transferred to them. This is particularly useful when the director has mixed company funds with personal funds or used company money to acquire other assets in their own name, as the court can follow the value through those transactions.
Can I get a court order to freeze a former director's assets before my case concludes?
Yes, you can apply for a freezing order (Mareva injunction) to prevent the former director from dealing with their assets up to the value of your claim. These are urgent applications that require you to show a good arguable case and a real risk that assets will be moved.
Should I pursue asset recovery or compensation from the former director?
Asset recovery is preferable when the original property still exists and can be identified, as it's faster and cleaner. Compensation claims are more appropriate when assets have been sold, dissipated, or mixed with other funds to the point where direct recovery is impractical. In practice, many claims involve both approaches—you recover what you can trace and claim compensation for the rest.
What if the former director claims they kept company property because they were owed money?
A former director cannot justify taking company property to offset unpaid salary or loans they made to the company—these are separate claims. The correct route is to pursue those claims through the courts, not to unilaterally take company property as a self-help remedy.
Can a director hide behind limited liability protection if they misappropriate company assets?
No, limited liability protects shareholders but does not protect directors from liability for their own wrongful acts. Section 228 of the Companies Act 2014 makes clear that a director who misappropriates company property can be held personally liable for resulting losses.
What should I do before confronting a former director about missing assets?
Gather and preserve all documentary evidence before making contact with the former director—once they know you're investigating, assets can move quickly. Start with bank statements, accounting records, inventory logs, and email correspondence that you can access directly.
