Legal products company which took £400K from clients in return for very little is wound up in the public interest
Goldstar Law Limited, a Nottinghamshire company which sold legal products meant to protect clients’ assets through wills, trusts and lasting powers of attorney, has been wound up in the High Court for failing to provide the services it claimed it could.
The winding up follows an investigation by the Insolvency Service.
The court heard that the company approached prospective clients by cold calling, followed by a home visit conducted by one of its sales staff.
The company received some £400,000 in the form of advance payments made by clients, but had provided very little in return.
Clients were required to pay in full and in advance for the legal products, the price of which ranged from £95 for a single will to £3,834 for a package of wills, trusts and lasting powers of attorney. The company informed clients that they would receive their legal products within 3 to 8 weeks.
Commenting on the case, Colin Cronin, an Investigation Supervisor with the Insolvency Service, said,
Goldstar Law limited used forceful and misleading sales practices to obtain upfront fees, from a predominantly elderly clientele, for legal products which it then failed to deliver.
The Insolvency Service will take firm action against companies which operate in this manner.
The investigation found that, as at 22 October 2013, some 15 months after the company started operating, it had failed to provide legal products to the overwhelming majority of its customers and that there was no realistic prospect of the position improving.
Despite having taken instructions and payment from 132 clients, it had finalised just 5 wills, 11 lasting powers of attorney and 4 estate preservation trusts. From the outset of its trading, the company had accepted clients even though it had no firm arrangements in place to produce and register the legal products.
The court also heard that the company operated with a lack of commercial probity in that it had sold ‘estate preservation trusts’ claiming these would enable clients to avoid their assets being used to pay for care home fees, without properly informing customers of the risk of local authorities challenging these arrangements.
Notes to Editors
Goldstar Law Limited was incorporated on 9 May 2012. The registered office is at Axholme House, North Street, Crowle, Scunthorpe DN17 4NB. It was previously at 122-126 Tooley Street, London SE1 2TU. The company carried on business from unit 7 Stevenson Court, Stevenson way, Brunel Drive, Newark NG24 2EG.
The petition to wind-up Goldstar Law limited was presented under s124A of the Insolvency Act 1986 on 17 February 2014. The company was wound-up on 21 July 2014.
Company Investigations, part of the Insolvency Service, uses powers under the Companies Act 1985 to conduct confidential fact-finding investigations into the activities of live limited companies in the UK on behalf of the Secretary of State for Business, Innovation & Skills (BIS). Further information about live company investigations can be found on our website at: http://www.bis.gov.uk/insolvency/Companies/company-investigation.
The Insolvency Service also administers the insolvency regime, investigating all compulsory liquidations and individual insolvencies (bankruptcies) through the Official Receiver to establish why they became insolvent. 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: http://www.bis.gov.uk/insolvency.
By virtue of the winding up order 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: firstname.lastname@example.org
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.
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Published: 4 August 2014
From: The Insolvency Service