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Testimonial: Director Avoids Imprisonment Following Company Liquidation

“Neil Davies & Partners achieved the best possible outcome for me and for my daughter. Their focus was on achieving our agreed objectives from the day I met them.”

In this case, our client was in a serious position, following the liquidation of his company. He was charged with four criminal law offences: failing to keep accounting records; acting as a company director whilst already having received a director disqualification period; failing to preserve the company’s accounting records and failing to deliver up to the Liquidators all the Company’s books and papers. All these allegations, if proven, carried at worst custodial sentences. In addition, our client’s daughter was also involved, unwittingly, facing three of the four charges. It was a highly stressful time for them. In this testimonial, our client explains how we worked, successfully, to achieve the best possible outcome in which he avoided prison.

The facts of this case

In the words of our client:

“I found myself criminally charged with four criminal law offences under the Companies Act 2006 (‘CA2006’) and the Companies Director Disqualification Act 1986 (‘CDDA’), alleging that I had:

  1. Caused my (liquidated) company ‘to fail to keep accounting records’ sufficient to show and explain the transactions of the company, in breach of section 387(1) of the CA2006.

POSSIBLE OUTCOME: maximum 7 years imprisonment and/or a fine.

  1. Whilst already a disqualified Director, acted as a Director of a limited company or had been involved in the management of a company, without leave/the permission of the Court, in breach of sections 1A and 13 of the CDDA.

POSSIBLE OUTCOME: maximum 2 years imprisonment and/or a fine.

  1. Being a Director of a failed limited company business, I had ‘failed to preserve’ its accounting records for 3 years from the date on which were made, contrary to section 389 (3) of the CA2006.

POSSIBLE OUTCOME: maximum 2 years imprisonment and/or a fine.

  1. Being an officer of the failed company, ‘failed to deliver up to the Liquidators’ all books and papers of the company which were in my custody or under my control and which I was required to deliver up, contrary to section 208(1)(c) of the Insolvency Act 1986.

POSSIBLE OUTCOME: up to 7 years imprisonment and/or a fine.”

How did I find out about the prosecution?

“I received a letter from the Insolvency Service in June 2021, telling me I had to attend the Magistrates Court on a date in September 2021.”

Distressingly, my Daughter was also unwittingly involved

“I was devastated at this development. Even worse was the fact that I had got my daughter unwittingly involved in the matters that gave rise to the matters complained of. She was also charged with three of the four offences. She was distraught.”

Who to turn to for help?

“I live in Lincolnshire as does my daughter. I was recommended to Neil Davies & Partners, a firm of Solicitors based in Birmingham. The geographic distance proved to be no barrier to the excellent representation that I received from NDP.

David Hanman and Neil Davies of NDP (the most senior people) advised me from day one to the conclusion of the case against us both. They were:

  • Always available to speak or meet with me.
  • Clear in explaining to us our options.
  • Clear in explaining the allegations made and how we should respond to them.
  • Clear in explaining the lines of Defence available to us.”

My/our objective

“My fundamental and key objective was to ensure that the prosecution against my daughter did not proceed, if at all possible. She is a young mum, who had not been involved in the failed business. She became involved, in ‘name only’ to assist me.”

Achieving that objective

“David engaged early on with the Prosecutor, by telephone in the first instance, to explain the wider position. We negotiated an outcome with the prosecution, which saw the prosecution against my daughter abandoned with my agreeing to plead guilty to two of the four offences. On the evidence, I had little prospect of successfully defending my position on those two allegations.”

My sentencing

“David explained to me that my having pleaded guilty to those 2 offences, I would have to attend at the Crown Court (the matter was transferred up from the Magistrates Court for sentencing purposes) for me to be sentenced.”

Representation at Court

“I was represented at Court by Bruce Stuart a Barrister, who worked closely with David and Neil in the run up to my final hearing.”

Mitigation

“The team prepared a detailed and compelling Mitigation Statement for me. Bruce was an excellent advocate for me at Court. He was user friendly and listened to me.”

The outcome – a custodial sentence was avoided

“I avoided a sentence of imprisonment. I am 67 years of age. I was mightily relieved. I am now able to continue my self-employed work and once again enjoy family life. Instead, I received a community sentence. This was the best outcome I could hope for.”

My reflections on this case

“I knew straightaway when I met David and Neil that I was being advised by very experienced, streetwise and caring professionals.

They achieved the best possible outcome for me and for my daughter. Their focus was on achieving our agreed objectives from the day I met them. I would certainly recommend the NDP Team to anyone facing a criminal investigation.”

(PD, Lincolnshire)

Talk to us if facing serious charges post Liquidation – from Director Disqualification to a possible Prison sentence 

Our experienced insolvency litigation and director disqualification specialists have a strong track record in successfully defending directors of liquidated companies who have received civil and/or criminal charges, as in this case.

If you or a colleague has received a letter from the Insolvency Service, detailing their intention to investigate or prosecute, the sooner you talk to us the better. As always, the chances of success depend on the facts of the case and we will always make it clear how good the chances of success are and the best approach to take.

Contact us or call us on 0121 200 7040 for a FREE and CONFIDENTIAL initial chat.