Good day

I need to account for a legal settlement in a company's books and want to make sure how to treat the accounting entry. I will give a short background of the type of settlement:

- 1 Director of the company was found guilty of fraudulent activities outside of the company and subsequently liquidated.

- There were claims against the director's estate and because the director made payments to the company for a loan owed to the company, the liquidators
demanded the amounts be paid back to be shared among all the claims.

A settlement amount was reached years later and paid over to the liquidators.

Will this be treated as an legal expense and will it be tax deductible? Also note the outstanding loan owed to the company was written off years ago.