The directors of a holding company which went into voluntary liquidation owing £222,274 have been disqualified for a combined 9 years from acting as directors for trying to disadvantage creditors by disposing of an asset that ought to have been included in the liquidation.
The disqualifications follow an investigation by the Insolvency Service.
William Paul Downes, (“Mr WP Downes”) 59 years old, and Michael Downes (‘M Downes’), were directors of Caber Limited which traded from Liverpool and went into liquidation on 18 May 2012.
On 22 and 23 July 2014 respectively, WP and M Downes both gave undertakings to the Secretary of State for Business, Innovation & Skills not to act as a director, manage or in any way control a company for a period of 6 ½ years from 22 July 2014 and 2 ½ years from 23 July 2014.
Commenting on the disqualifications Sue MacLeod, Chief Investigator of Insolvent Investigations, Midlands & West at the Insolvency Service, said:
Directors who make false statements in the liquidation or who put assets beyond the reach of company creditors will be investigated, and removed from the business environment.
The investigation found that during the liquidation process Mr W P Downes submitted two statements of affairs which disclosed that a book debt of £250,000 was due to the company.
The liquidator took steps to recover this book debt which was disputed and applied to court for it to be included in the liquidation. Mr WP Downes gave evidence at the court hearing in support of the liquidator’s claim, and on 25 September 2012 the court ruled that the asset belonged in the liquidation.
However, two days after the court hearing and contrary to his evidence in court, Mr WP Downes informed the liquidator that the book debt had in fact been assigned to another company for £100 in February 2012.
The liquidator issued further court proceedings, seeking an order that the assignment of the book debt had no effect or alternatively that the transaction constituted a transaction at an undervalue. In May 2013, a commercial settlement was agreed and Caber Limited retained the book debt after paying the other company £5,000. In total Caber Limited recovered only £28,335
As a result of the legal actions the liquidator has reported that Caber Limited’s creditors will not receive a dividend.
Notes to Editors
- Mr WP Downes’ date of birth is 30 November 1954. He was registered as director from 17 March 2000 until the date of liquidation.
- Michael Downes’ date of birth is 7 April 1982. He was registered director from 17 June 2002 until the date of liquidation.
- Caber limited had been incorporated on 14 January 2000 and traded from 2 – 4 Kitchen Street, Liverpool L1 0AN.
- Caber Limited entered voluntary liquidation on 18 May 2012.
- Mr WP Downes’ undertaking started 22 July 2014
- Mr M Downes’ undertaking started 23 July 2014. A disqualification order has the effect that without specific permission of a court, a person with a disqualification cannot;
- act as a director of a company;
- take part, directly or indirectly, in the promotion, formation or management of a company or limited liability partnership;
- act as an insolvency practitioner; or
- be a receiver of a company’s property. In addition many other restrictions are placed on disqualified directors by other regulations.
Disqualification undertakings are the administrative equivalent of a disqualification order but do not involve court proceedings.
Further information on director disqualifications and restrictions can be found at https://www.gov.uk/government/collections/information-about-company-director-disqualification
The Insolvency Service administers the insolvency regime, investigating all compulsory liquidations and individual insolvencies (bankruptcies) through the Official Receiver to establish why they became insolvent. It may also use powers under the Companies Act 1985 to conduct confidential fact-finding investigations into the activities of live limited companies in the UK. In addition, the agency authorises and regulates the insolvency profession, deals with disqualification of directors in corporate failures, assesses and pays statutory entitlement to redundancy payments when an employer cannot or will not pay employees, provides banking and investment services for bankruptcy and liquidation estate funds and advises ministers and other government departments on insolvency law and practice.
Further information about the work of the Insolvency Service, and how to complain about financial misconduct, is available from:
All public enquiries concerning the affairs of the company should be made to: The Official Receiver, Public Interest Unit, 2nd Floor, 3 Piccadilly Place, London Road, Manchester, M1 3BN. Tel: 0161 234 8531 Email: email@example.com
Media enquiries only should be directed to: Kathryn Montague, Media & Campaigns Manager on 0207 674 6910 or Ade Daramy, Media Manager on 0207 596 6187.
You can now subscribe to get e-mail alerts from the Insolvency Service. To subscribe, go to our website:www.bis.gov.uk/insolvency and you will see a button to “sign up for email alerts and newsletters”, or click on the following link: https://public.govdelivery.com/accounts/UKIS/subscriber/new
The Insolvency Service is now on twitter, you can follow us at @insolvencygovuk.
Published: 6 August 2014
From: The Insolvency Service