“Throughout a very stressful process, I always felt I was in safe hands.”
One of our clients said this after Neil Davies and Tom Clinton helped him and his fellow director see off an Insolvency Service (IS) director disqualification investigation into their conduct and avoid a possible director disqualification outcome. This case study details how the investigation came about and how we were able to work with the client to get their response to the IS’s questionnaire right, after which the IS dropped its investigation.
What led to the investigation?
The two directors ran a gym in an area that never had much passing custom. Money coming in covered the essentials, rent, utilities, the creditors who had to be paid to keep the lights on, but HMRC payments fell behind. The accounts filed at Companies House were not put together well either, more a case of inexperience and taking their accountant’s word for it than anything deliberate.
Then the premises flooded. Fixing the damage would have cost more than the gym was bringing in, so that was that and trading stopped. In the last few weeks before liquidation, the two directors handed their shares and directorships to someone else, on the strength of an introduction from another company. a decision the IS would go on to scrutinise along with everything else.
The four areas the Insolvency Service wanted answered.
These were: HMRC arrears; what had happened to company funds; the state of the filed accounts at Companies House; and that last minute transfer of shares and directorships before the company went under.
In addition to these four key questions, the directors were already dealing with the loss of a business and were now facing the prospect of being found to be unfit to continue to act in the management of companies. In other words, director disqualification was a real possibility.
Getting the Insolvency Service questionnaire right
Neil and Tom sat down with both directors to work out exactly what the Insolvency Service needed to see on each point, then built the answers around the evidence rather than around how the directors felt about what had happened. We have written before about how that distinction regarding Insolvency Servicer questionnaires trips people up and the mistakes that are often made when completing the questionnaire. In our experience, a rushed or emotional answer to a questionnaire like this can turn a straightforward enquiry into a full investigation, so we took the time to get it right first time.
The outcome
The Insolvency Service dropped the director disqualification investigation at the questionnaire stage. As a result, no disqualification proceedings were taken against either director.
The client told us:
“I cannot recommend Tom Clinton highly enough.
From the outset, Tom was professional, knowledgeable and incredibly easy to deal with. He explained complex legal issues clearly, gave honest and practical advice, and always focused on achieving the best possible outcome.
What stood out most was how responsive and accessible he was throughout. He was always quick to reply, happy to take a call when needed, and I was never left wondering what was happening or unable to get hold of him.
Throughout a very stressful process, I always felt I was in safe hands. I wouldn’t hesitate to recommend Tom and the team at Neil Davies & Partners.”
If you have received a questionnaire from the Insolvency Service, talk to us.
Before you fill in an Insolvency Service questionnaire, contact us or call us on 0121 200 7040 for a free initial discussion. Our experienced director disqualification specialists have a strong track record in convincing the Insolvency Service to not continue with their investigations.
We act for directors facing Insolvency Service investigations across London, Birmingham and the rest of the UK – wherever the questionnaire lands.
About Neil Davies and Tom Clinton
Neil Davies qualified as a solicitor in 1987 and co-founded Neil Davies & Partners with Sukhbir Mall in 2007. He is a member of the Insolvency Lawyers Association, and sits on the advisory board of Mithani on Directors’ Disqualification, the leading text on director disqualification law and practice, alongside its author Abbas Mithani KC.
Tom Clinton joined NDP as a paralegal in May 2022, became a trainee solicitor that November, and qualified as a solicitor in summer 2024. He works alongside Neil on director disqualification and Insolvency Service investigation matters, including cases like this one.
