High Court finds fraudulent trading in Genesis collapse

The High Court has found four individuals liable for fraudulent trading in connection with failed haulage company Genesis (2014) UK Ltd, ruling that the business was carried on with intent to defraud creditors after a worldwide freezing order was imposed in May 2021.

ICC Judge Mullen held that Marcus Hughes, Tracy Greening, David Hughes and Daniel Clarke were knowingly involved, to differing degrees, in moving assets and diverting payments beyond creditors’ reach. Claims against Nicholas Plant and Helen Walker were dismissed for lack of sufficient evidence. The proceedings were brought by SQN Global Limited, which had taken an assignment of the liquidators’ section 213 Insolvency Act 1986 claim and had an admitted claim of about £6.15 million in Genesis’s liquidation.

Genesis lost its operating licence in early 2021 after a traffic commissioner concluded that Marcus Hughes continued to play a significant managerial role despite an earlier disqualification. After SQN obtained a freezing order requiring Genesis to preserve at least £1.75 million of assets, the Court found that money continued to leave company accounts, customer payments were redirected and assets were transferred to associated company Clarence Road Vehicle Services Limited.

Judge Mullen found Marcus Hughes remained a de facto director, Greening was a de jure director and David Hughes became a de facto director and actively sought to divert payments. They will be jointly and severally liable for the loss caused by the fraudulent conduct. Clarke was also found liable for facilitating transfers to CRVS, although his contribution will be limited to losses linked to assets shown to have been transferred there and related trailer hire income. A further hearing will determine the precise contribution amounts, interest and costs.

Read the decision here.

Rory Brown KC of South Square (instructed by Black Swan Law) acted for SQN.