Lift installers get 7-year bans for accepting customer deposits when company was insolvent
Stuart Michael Conneely and Mark Orest Kaspruk, the directors of Chevron Lifts Ltd (“Chevron”), have been disqualified for 7 years each for accepting a deposit when they ought to have known there were no reasonable grounds for believing they would be able to provide the goods. They also entered into transactions to their benefit totalling £18,582 whilst Chevron was insolvent.
Mr Conneely’s and Mr Kaspruk’s disqualification follows an investigation by the Insolvency Service.
Mr Conneely (39) and Mr Kaspruk (51) have given undertakings to the Secretary of State for Business, Innovation & Skill, which prevents them from becoming directly or indirectly involved in the promotion, formation or management of a company for 7 years from 13 August 2014.
Commenting on the disqualification, Sue Macleod, Chief Investigator at The Insolvency Service, said:
This is a case in which the directors clearly accepted a deposit from a customer when the company was insolvent.
Directors have fiduciary duties to company creditors and behaviour such as this is likely to lead to investigation by the Insolvency Service and result in disqualification.
In giving their undertakings, Mr Conneely and Mr Kaspruk accepted that:
- They caused or allowed Chevron Lifts Ltd (“Chevron”) from 24 to 26 November 2010 to enter into transactions to Mr Kaspruk’s benefit and to the detriment of its other creditors by paying £18,582 to him at a time when Chevron was insolvent.
- Chevron paid £5,082.30 to Mr Kaspruk on 24 November 2010, and £4,500 on 25 November 2010.
- Chevron paid £9,000 to Mr Kaspruk on 26 November 2010, the day after receiving professional advice that no payments should be authorised to existing creditors and that no creditor should be preferred over another.
- These payments were to the detriment of creditors (other than the directors) totalling £577,659.
- Despite receiving professional advice on 24/25 November 2010 not to accept customer deposits, on 29 November 2010 they caused or allowed the company to obtain a customer deposit of £11,471 for goods and services when they knew or ought to have known the company was insolvent and that there were no reasonable grounds for believing the company would be able to provide the goods or services.
- On 29 November 2010, Chevron paid £11,471 from a customer into the company bank account for goods/services, which were then not supplied but which reduced the personally guaranteed overdraft by £11,471.
The investigation showed that:
A creditor obtained a County Court judgement for £83,141.45 against Chevron on 27 November 2009, and on 16 December 2009, petitioned for Chevron to be wound up. The company disputed the debt, but offered a £20,000 settlement on 11 November 2010, which was rejected. Chevron also had VAT arrears of £93,197 overdue from 31 July 2010 and PAYE/NIC arrears of £64,538 overdue from at least 19 April 2010. The directors sought advice on 11 and 24/25 November 2010 regarding placing Chevron into administration.
On 30 November 2010, directors met with an insolvency practitioner to place Chevron into liquidation
Notes to Editors
Chevron Lifts Ltd was incorporated on 25 November 1994. It traded as lift engineering from Chevron House, Unit 2 Barn Way, Lodge Farm Industrial Estate, Northampton NN5 7UW
From 29 November 1994 Mr Kaspruk (date of birth: 11 October 1962), who is of Northampton. was appointed director and from 25 February 2009 Mr Conneely (date of birth: 23 October 1974), who is of Northamptonshire, was appointed director.
The company went into Liquidation on 14 December 2010. On 23 July 2014 the Secretary of State accepted a Disqualification Undertakings from Mr Conneely and Mr Kaspruk , effective from 13 August 2014, for a period of 7 years each.
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: https://www.gov.uk/government/collections/information-about-company-director-disqualification
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Published: 19 August 2014
From: The Insolvency Service