CREDITORS of a south coast investment management company wound up for tax arrears have won their £1m claim against its former director.

But whether £1m would be enough to pay all the creditors of MDA Investment Management Ltd "re-mains doubtful", warn Hampshire insolvency practitioners Buchanans.

MDA Investment Management Ltd was controlled by Malcolm Doney, now living on Captiva Island, Florida, but originally from Bournemouth.

The High Court found that Mr Doney had been misfeasant - guilty of improper performance of an act lawful in itself - when, in July 1998, he caused a substantial part of the proceeds of a £2.4m sale of MDA business to be paid to himself and a business partner rather than to the company.

The court also concluded that, after the sale, Mr Doney misfeasantly paid away more than £100,000 of the company's money.

In early 2000 MDA Investment Management Ltd was placed in liquidation by the High Court after a petition from Inland Revenue for substantial tax arrears.

Peter Whalley, managing director of chartered accountant Buchanans, based at Cumberland Place, South-ampton, said: "I took over as liquidator from the Official Receiver in April 2000 because aggrieved creditors wanted me to take a look at where the money had gone.

"There was an estimated deficiency of nearly £750,000. I concluded that these transactions appeared to be misfeasant and in December 2000 commenced the proceedings which have led to this judgement.

"Whilst the court will hear further argument on detailed aspects of the amount to be awarded to the liquidator, initial estimates are that the sums involved will be in the region of £1m plus interest and costs.

"Whether this sum will be sufficient to pay creditors in full remains doubtful as there have been very substantial legal, professional and other costs in launching and prosecuting this claim over a three-year period."

He remains "cautiously optimistic" that the creditors should now receive "some recovery" in relation to their unpaid debts.

Mr Whalley added: "I am a great enthusiast of recent changes to insolvency law designed to encourage enterprise and make the consequences of failure less onerous.

"Nevertheless, this judgement makes it quite clear that directors of insolvent companies who put their personal interests ahead of the creditors take a very significant risk."

He also paid tribute to the assistance he has received from John Randall QC; Bell Pope solicitors of Southamp-ton; and Insolvency Management of Kidderminster.

Mr Doney declined to comment.