Intent to defraud the Italian creditor:

The company owed money to trade creditors and also had outstanding against it a large claim for breach of contract which it disputed (though the claimant had obtained judgement in his favour in the Italian courts).  The directors used the remaining assets to discharge the trade debts.  When the company went into liquidation the liquidator sought a declaration that the directors had carried on business with intent to defraud the Italian creditor.

In paying the other debts the directors had "carried on business" but this was not a case of "intent to defraud" the Italian claimant, whose claim they did not accept.  (The issue of possible fraudulent preference of the trade creditors was not raised).

If the liquidator considers that there has been fraudulent trading he should apply to the court for an order that those responsible (usually the directors) are liable to make good to the company all or some specified part of the company's debts.  If the liquidator does not do this a creditor might be able to obtain an order that those at fault must pay the creditor direct: Re Cyone Distributors (1967).  The liquidator should also report the facts to the Attorney General so that he may institute criminal proceedings.