Shaun Fountain and Deborah Fountain, directors of Fountain’s Choice Limited, which ran a number of pubs, have each been disqualified for 8 years for failing to keep adequate books and records of the company.
The company managed a number of pubs solely owned by Mr Fountain in Bradford and Leeds (including The Regent Hotel on Kirkgate, the Three Legs on the Headrow, The Three Horshoes on Otley Road, and Tommy Wass on Dewsbury Road – all in Leeds) until it entered into liquidation on 18 November 2013, with an estimated deficiency of £213,081.
The failure to ensure that adequate books and records of Fountain’s Choice Ltd were preserved and/or delivered up to the liquidator means that it has not been possible to explain the causes of failure of the company or accurately detail the acquisition and disposal of its assets or its financial position at any point in its trading life.
It has also not been possible to determine the true nature and amount of the directors’ remuneration and whether such payments were treated properly for taxation purposes.
Furthermore, it was not possible to explain why net funds of £689,300 were transferred to a related company, net funds of £14,979 were transferred to another related company and why £15,214 was transferred to an unidentified bank account.
Nor was it possible to determine the purpose of cheque payments and cash withdrawals totalling £18,744, additional transactions debiting the company’s bank account totalling £58,740 and why payments totalling £39,527 debited the company’s bank account to purchase the fixtures, fittings and franchise fees for public houses which were in the sole names of Mr and Mrs Fountain.
Robert Clarke, Head of Company Investigation at the Insolvency Service said:
Directors have a duty to ensure that their companies maintain proper accounting records, and, following insolvency, deliver them to the office-holder in the interests of fairness and transparency. Without a full account of transactions it is impossible to determine whether a director has discharged his duties properly, or is using a lack of documentation as a cloak for impropriety.
Notes to editors
Shaun Fountain’s date of birth is 28 April 1955 and Deborah Fountain’s date of birth is 29 August 1978. They reside in Bingley, West Yorkshire.
Fountain’s Choice Limited (CRO No.07945721) was incorporated on 10 February 2012 and traded from its registered office at AHS House, Princess Works, Birds Royd Lane, Brighouse, West Yorkshire, HD6 1LH and a number of public houses in Leeds and Bradford.
Mr and Mrs Fountain acted as directors of the company from 10 February 2012 until it entered into voluntary liquidation on 18 November 2013 with an estimated deficiency of £213,081.
On 18 February 2016 the Secretary of State accepted Disqualification Undertakings from Shaun and Deborah Fountain effective from 10 March 2016 for a period of 8 years. The matters of unfitness, which Mr and Mrs Fountain did not dispute, were that:
“I failed to ensure that Fountain’s Choice Limited (Fountains) maintained and/or preserved, or in the alternative, I failed to deliver up adequate accounting records for the period from incorporation on 10 February 2012 until entering liquidation on 18 November 2013.
As a result it has not been possible to ascertain and/or verify:
- Why net payments of £689,300 were transferred to a related company, between 31 July 2013 and 07 November 2013.
- Why a total of £14,979 was transferred to a related company between 28 August 2012 and 25 June 2013.
- The purpose of net transfers totalling £15,214 to an unidentified bank account between 23 April 2012 and 14 October 2013.
- The purpose of cheque payments and cash withdrawals of £18,744 between 13 June 2012 and 25 October 2013.
- The true nature and amount of the directors’ remuneration, dividends and benefits from Fountains and whether such payments were treated properly for taxation purposes.
- Whether Fountains acquired or disposed of any assets, and its financial position at any point in the life of its trading.
- The disposal of 3 vehicles purchased for £43,907 and the disposal proceeds of such vehicles.
- The purpose of payments totalling £39,527 to purchase the fixtures and fittings and a franchise fee for 2 separate public houses in the sole names of me and my co director.
- The purpose of debits from the bank account of £58,740 between 01 May 2012 and 02 December 2013.”
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
- be a receiver of a company’s property
In addition that person cannot act as an insolvency practitioner and there are 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 here.
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Published: 1 March 2016
From: The Insolvency Service