Director Disqualification and Insolvency

A SLIGHTLY MORE UNUSUAL DIRECTOR DISQUALIFICATION. 

According to a recent press release from the Insolvency Service, a Mr Russell Gwyn Williams (‘Mr Williams’) received a director disqualification period of 7 years on 23rd June 2015 for trading whilst insolvent.

In our experience, as specialists in director disqualification, Mr Williams’ disqualification was slightly unusual because he was disqualified for trading to the detriment of creditors, between 25 January 2013 and 14 August 2013, whilst the company Bets Centres Ltd (‘the Company’), a garage repairer and MOT specialist, was already insolvent. It is stated that further liabilities of £106,097.00, including £89,134.00 for Crown PAYE/NIC and VAT were incurred.

In addition the Insolvency Service states that Mr Williams personally benefited by causing £107,200.00 in transactions to the detriment of creditors. In fact it would appear that the Company only traded for a little over 18 months prior to being placed into Creditors Voluntary Liquidation.

Why Is This Director Disqualification Case Slightly Unusual and Comparatively Rare?

Being disqualified as a director for such misconduct – trading to the detriment of creditors whilst the company involved is already insolvent – is, in our experience, comparatively rare because of the difficulties in proving a date from which knowledge of insolvency can be attributed to the Director. Nevertheless, Sue MacLeod, Chief Investigator of the Insolvency Service, commenting on this case, said:

“In investigating insolvent companies, the Insolvency Service always looks very closely at individuals who demonstrate a disregard for creditors and appropriate action is taken where wrongdoing is uncovered.”

The Director May Well Face Further Action Beyond Director Disqualification

In addition to Mr Williams’ existing director disqualification undertaking, which prevents him from becoming involved in the promotion, formation or management of a company until 2022, one would imagine that the Liquidator is contemplating action against him personally, for misfeasance for breaches of his duties as a director and possibly for wrongful trading. In this instance, Mr Williams could be found personally liable for the debts of the company because the company did not cease trading sooner so as to protect its creditors.

We Can Help if you Are Facing Director Disqualification Proceedings

Whatever action you are facing – director disqualification, misfeasance or otherwise – whether by the UK Insolvency Service or a UK Based Liquidator, our director disqualification solicitors can help. However, it is always the case that the earlier you seek and obtain advice the more we can likely help.  Please call on 0121 200 7040 or contact us today for a free, no obligation chat.

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