Yodel Delivery Network Ltd v Corlett – Breach of Director’s Duties

Yodel Delivery Network Ltd v Corlett and others (2025) EWHC 3355 (Ch)

In February 2024, entrepreneur Jacob Corlett, through his company YDLGP Limited, acquired Yodel Delivery Network Ltd for the symbolic sum of £1.

The company was already balance sheet insolvent, struggling financially, and facing mounting pressure from creditors.

Still, Corlett saw opportunity where others saw collapse.

Read the full case at Yodel Delivery Network Ltd v Corlett and others (2025) EWHC 3355 (Ch)

A Merger with Potential

His plan was ambitious as he wanted to merge Yodel with his logistics technology business, Shift Global Holdings, into a new structure that would create what he believed would be a stronger, more technologically advanced logistics group. The merged company, intended to be called Yodel Shift Group, was meant to generate substantial “synergistic value.”

Financial Trouble Deepens and Leadership Begins to Crack

By May and June 2024, Yodel’s financial position had worsened significantly.

The company was reportedly losing at least £500,000 per week, owed millions to HMRC, and was under heavy scrutiny from its lender, IGF Business Credit Ltd.

At the same time, tensions were rising internally as former CEO Michael Hancox, who remained involved in the business during this period, had serious concerns over Yodel’s direction. Hancox’s resignation letter cited:

Unauthorised money transfers from Yodel to Shift
Corlett’s tendency to exclude Yodel’s board from decision-making
Ongoing disputes regarding unpaid compensation owed to him.

Hancox Heads to the Rescue

After resigning amid disputes over governance, unauthorised fund transfers, and exclusion from key decision-making, former CEO Michael Hancox quickly re-emerged at the centre of Yodel’s future when he became involved with Judge Logistics Ltd, the entity that ultimately acquired Yodel on 21 June 2024. The court noted that Judge Logistics was controlled by Hancox and purchased Yodel for just £1 as the business stood on the brink of administration.

At the same time, PayPoint plc, Yodel’s key prospective £10 million investor, shifted its support away from Corlett after indicating it would not invest while he remained in control, effectively backing the Hancox-led rescue instead. This dramatic turn meant that the very investor Corlett had been relying on to save Yodel instead supported the transaction that removed him from ownership entirely, allowing Hancox to return to the business through a new competing vehicle and take control of Yodel’s future direction.

Breaking Down the Lawsuit

Yodel Delivery Network Ltd brought proceedings against Jacob Corlett, his company YDLGP Limited, Shift Global Holdings, and other associated parties after Yodel’s ownership transferred to Judge Logistics in June 2024. Yodel alleged that Corlett had breached his statutory and fiduciary duties while acting as a director, including by improperly attempting to create and issue warrant instruments that would have granted him and his associates majority control of the company even after he had sold it.

Yodel also sought relief in relation to alleged breaches of contract and improper transactions connected to payments and agreements made during Corlett’s period of control. In response, Shift and Corja counterclaimed, looking to force Yodel to honour the disputed warrants and issue them more than 1.8 billion shares, which would have handed them majority ownership of the company.

Corlett Breached His Duties as a Director

While there were many other issues presented during this case, there were strong findings regarding Corlett’s breach of director duties.

Under the Companies Act 2006, directors owe strict duties to act:

Within their powers
In the best interests of the company
With regard to creditor interests when insolvency is a concern

The High Court found that Corlett breached those obligations.

Breach of Section 171: Acting Outside Proper Purpose

The court held that Corlett breached section 171 of the Companies Act, which requires directors to use their powers only for proper purposes.

Specifically, the judge found that the power to issue shares and warrants existed to:

Raise capital,
Reward performance, or
Incentivise employees.

It did not exist to preserve value or control for select insiders if ownership changed hands.

The court concluded that the warrants were instead intended to “preserve a majority share of the value of the company to Shift and Corja in the event that YDLGP had to sell its shares.”

Understanding the Warrants in This Case

A warrant was a legal right that would allow the holder to purchase shares in Yodel at a set price in the future if certain events occurred. More specifically, the disputed warrant instruments allegedly gave individuals and entities connected to Jacob Corlett the right to acquire substantial shares in Yodel for a nominal amount of 0.01p per share following a sale or disposal of the company.

If exercised, these warrants would have resulted in the issue of more than 1.8 billion shares, handing the recipients majority control of Yodel despite them not purchasing the company outright. The warrants were therefore not simply administrative documents, they were nothing more than a potential transfer of ownership and control. The main issue before the court was whether these warrants had been validly created and whether they were lawfully issued in the first place.

Breach of Director’s Duty to Creditors During Insolvency

Because Yodel was insolvent at the time, Corlett also owed duties not just to shareholders, but to creditors.

The court found that Yodel was balance sheet insolvent throughout the relevant period and Corlett knew this. Any decision affecting ownership and value had to consider creditor interests.

Instead, the court found Corlett acted primarily in the interests of himself and associated parties, not Yodel or its creditors.

Why This Case Matters

The High Court reinforced that once a company approaches insolvency, directors’ responsibilities shift beyond shareholders and toward protecting creditor interests, and any attempt to prioritise personal control, insider advantage, or self-preservation over those duties can have serious legal consequences.

The case also highlights the importance of proper corporate governance, board transparency, and lawful decision-making in high-pressure business environments. No matter how ambitious the vision or urgent the circumstances, directors must operate within their legal powers and in the best interests of the company, not themselves, or risk significant personal and professional fallout.

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