The liquidators submitted that the directors were guilty of wrongful trading (Insolvency Act 1986 section 214).
They had continued to trade after a crisis meeting, which should have made clear there was no reasonable prospect of coming out of insolvency.
The liquidators also alleged misfeasance (section 212) through years of disorganised financial and accounting records and this was what made it difficult to tell whether the company was insolvent.
Park J held that the liquidators had failed to show a case of wrongful trading or misfeasance.
But the misfeasance claim was in respect of breach of directors' duties to Continental Assurance, and therefore a loss had to be shown.