The Department of Enterprise, Trade and Investment (the Department) has accepted disqualification undertakings from five Directors of a Ballymoney property development company.
Samuel Thomas Pollock (49) and Pauline Sara Pollock (43) both of Vow Road, Ballymoney and John Ramsey Pollock (46) of Bendooragh Road, Ballymoney were disqualified for seven years each and Richard Carson Pollock (46) and Sylvia Ann Pollock (43) both of Bendooragh Road, Ballymoney, were disqualified for five years each in respect of their conduct as directors of Pollock Developments Ltd (“the Company”).
The Company carried on the business of owning and managing property, with its primary aim of developing lands for onward disposal from Vow Road, Ballymoney, Co. Antrim. It went into administration on 2 September 2010 with estimated total assets available for preferential creditors of £55,000, liabilities to preferential creditors of £370, liabilities to the floating charge holder of £7,389,000, liabilities to non-preferential creditors of £236,772, and an estimated deficiency as regards creditors of £7,571,142. After taking into account the losses incurred by members (the shareholders) of the Company the total estimated deficiency was £7,571,147.
The Department accepted the disqualification undertakings from the directors on 20 June 2013 based on the following unfit conduct which solely for the purposes of the disqualification procedure was not disputed:
· causing and permitting the Company to continue to trade during the period from 18 May 2009 to the date of cessation of trading on 2 September 2010, at a time when they knew or ought to have known that it was insolvent, causing the losses incurred by creditors to increase substantially;
· in failing to maintain proper and accurate accounting records, they failed to monitor the affairs of the Company and to maintain financial control of the Company, and are thereby directly responsible for the Company’s insolvent position;
· failing to ensure that the Company’s statutory records were maintained;
· failing to file annual accounts for the Company for the years ended 31 March 2004, 31 March 2005, 31 March 2007, 31 March 2008, and 31 March 2009 on time.
The following additional matter of unfit conduct alleged by the Department in relation to Samuel Thomas Pollock, Pauline Sara Pollock and John Ramsey Pollock and not disputed was:
· withdrawing funds totalling £378,319 from the Company for personal benefit to the detriment of the Company’s creditors and without the recorded consent of the Company’s shareholders;
The following additional matter of unfit conduct alleged by the Department in relation to Samuel Thomas Pollock and Pauline Sara Pollock and not disputed was:
· breaching their fiduciary duty as directors of the Company as they contributed to the dissolution of a company, which was recorded in the Company accounting records as a debtor, to the detriment of the creditors;
The following additional matter of unfit conduct alleged by the Department in relation to Richard Carson Pollock and Sylvia Ann Pollock and not disputed was:
· permitting Samuel Thomas Pollock, Pauline Sara Pollock and John Ramsey Pollock to withdraw excessive funds from the Company to the detriment of the Company’s creditors and without the recorded consent of the Company shareholders;
The Department has accepted 55 Disqualification Undertakings and the Court has made 6 orders disqualifying directors in the financial year commencing 1 April 2013.
Notes to editors:
1. Samuel Thomas Pollock, John Ramsey Pollock and Richard Carson Pollock are brothers; Samuel Thomas Pollock and Pauline Sara Pollock are married; Richard Carson Pollock and Sylvia Ann Pollock are married.
2. Insolvency Practitioners acting as voluntary liquidators, administrative receivers and administrators have a duty to report unfit conduct to the Insolvency Service within the Department of Enterprise, Trade and Investment.
3. The aim of the Department is to bring disqualification proceedings against those directors of failed companies who have abused the privilege of limited liability status through negligence, incompetence or lack of commercial probity. The legislation contained in the Company Directors Disqualification (Northern Ireland) Order 2002 (“the 2002 Order”) is for the protection of the public and trading community but its operation should not inhibit genuine enterprise.
4. In cases where a person is subject to either a Disqualification Order made by the Court or a Disqualification Undertaking accepted by the Department, that person shall not be a director of a company, act as a receiver of a company's property or in any way, whether directly or indirectly, be concerned or take part in the promotion, formation or management of a company unless he has the leave of the High Court. A disqualified person cannot obtain permission to act as an Insolvency Practitioner.
5. Article 9 of the 2002 Order provides that where a director is found to be unfit he must be disqualified for a minimum period of two years, up to a maximum of fifteen years. The Courts have decided that the level of seriousness of unfit conduct can fall into three brackets with the top bracket of periods over ten years reserved for particularly serious cases, six to ten years reserved for cases which do not merit the top bracket and two to five years for cases where, although disqualification is mandatory, the case is less serious.
6. The 2002 Order also allows directors, with the agreement of the Department, to avoid the need for a court hearing by offering an acceptable Disqualification Undertaking. This has exactly the same legal effect as a Disqualification Order made by the court, and will usually include a schedule identifying the director’s unfit conduct. The consequences of breaching a Disqualification Undertaking are the same as those for breaching a Disqualification Order.
7. If anybody contravenes a Disqualification Order or breaches their Disqualification Undertaking they may be committing a criminal offence and could go to prison for up to two years or face a fine or both. Any person with information to suggest that a disqualified person has acted in contravention of this provision should contact The Insolvency Service’s Directors Disqualification Unit on 028 9054 8508.
8. The period of disqualification commences at the end of 21 days beginning with the day the Disqualification Undertaking was accepted by the Department.