The Department of Enterprise, Trade and Investment (the Department) has accepted a disqualification undertaking for four years from the director of a Belfast property development company.
Stephen Robert Gray (37) of Fortwilliam Park, Belfast agreed to disqualification in respect of his conduct as a director of Gainsborough Property Sales Ltd (“the Company”).
The Company carried on the business of property development from York Road, Belfast and went into administrative receivership on 7 September 2010 with estimated total assets available for preferential creditors of £200,000, liabilities to the preferential creditor of £330,000, liabilities of £26,837 to unsecured creditors, and an estimated deficiency as regards creditors of £156,837.
After taking into account the losses incurred by members (the shareholders) of the Company the total estimated deficiency was £156,839.
The Department accepted the disqualification undertaking from Stephen Robert Gray on 19 September 2013, based on the following unfit conduct which solely for the purposes of the disqualification procedure was not disputed:
· failing to submit a Statement of Affairs for the Company;
· causing and permitting the Company to continue to trade from April 2005 until cessation of trading in September 2010 with the knowledge of insolvency to the detriment of creditors;
· causing and permitting the Company to fail to file Form CT600 company tax returns for the periods to 31 December 2005, 31 December 2006, 31 December 2007 and 31 December 2008;
· failing to comply with his obligations under legislation in that the accounts for the Company in respect of the years ended 30 April 2006, 30 April 2007, 30 April 2008 and 30 April 2009 were not filed.
The Department has accepted 57 Disqualification Undertakings and the Court has made six orders disqualifying directors in the financial year commencing 1 April 2013.
Notes to editors:
1. 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.
2. 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.
3. 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.
4. 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.
5. 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.
6. 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.
7. The period of disqualification commences at the end of 21 days beginning with the day the Disqualification Undertaking was accepted by the Department.