Director Disqualification – Persuading the Insolvency Service to Abandon a Case.
In a recently concluded director disqualification investigation, the specialist team at NDP was instructed by 3 client directors of a substantial company (operating in the care home sector) that had been placed into administration, some years before.
The areas of Director conduct that were being investigated by the Insolvency Service included:
1. Trading to the detriment of the Crown (in excess of £600,000.00 owed); and
2. Alleged accounting records deficiencies in the failed Company.
The directors had to respond credibly and fully to the allegations under investigation to have any hope of avoiding being disqualified as directors. They came to NDP for advice on the recommendation of their business adviser.
Our Strategy to Avoid Director Disqualification
NDP prepared for and attended a meeting at the offices of the Insolvency Service with the objective of personalising the case for the directors who had “lived the case”.
Depending upon the case and the allegations faced, such a face to face meeting with the opponent can in NDP’s experience be a very useful strategy in director disqualification cases.
The meeting allowed the directors to put forward their side of the story and allowed the Insolvency Service and its solicitors to assess the credibility of these 3 directors, which was already obvious to us.
After the meeting and under NDP’s advice and guidance, credible evidence was obtained and produced to the Insolvency Service to answer the areas of concern identified. In addition, documents and information were provided to the Insolvency Service to support the position of the directors and NDP used its experience and expertise as director disqualification solicitors to comment upon that evidence to the Insolvency Service.
The Proposed Director Disqualification Was Dropped
Approximately one month after the evidence was filed with the Insolvency Service, it confirmed that it would not be in the public interest to take any further action against NDP’s clients. The proposed disqualification of the directors was dropped.
NDP was able to answer the Insolvency Service’s areas of concern as follows:
1. Credible evidence was advanced and accepted that a commercial property was to be sold to pay the Crown debt and that the company had taken steps to reduce its overheads and the number of its employees; and
2. Sufficient accounting records had in fact been delivered up for the allegation not to be proceeded with (to include an accompanying explanation of various transactions).
We can help with Director Disqualification
This case shows that if allegations from the Insolvency Service can be answered in the right way with credible and where possible contemporaneous evidence, then the Secretary of State can, will and does back off in director disqualification cases and takes no further action against the directors.
If you are facing the threat of director disqualification, please contact us or call us on 0121 200 7040 for a free no obligation chat. Your case will always have a personalised strategy constructed by our solicitors based upon the facts. It is our belief that no hole is too deep for us to make a difference, but It is always the case that the earlier you come and see us the more likely it is that we will be able to help.