The Department of Enterprise, Trade and Investment (the Department) has accepted disqualification undertakings from two Directors of a Londonderry ventilation services business.
Ivan James Dunlop (42) and Julie Dunlop (42) both of McCartney Park, Londonderry were disqualified for five and four years respectively in respect of their conduct as directors of Dunlop Ventilation Services Ltd (“the Company”).
The Company carried on the business of ventilation services from Bay Road Industrial Estate, Londonderry and went into liquidation on 14 December 2010 with estimated total assets available for preferential creditors of £12,665, liabilities to preferential creditors of £4,920, liabilities to unsecured creditors of £324,308, and an estimated deficiency as regards creditors of £316,563. After taking into account the losses incurred by members (the shareholders) of the Company the total estimated deficiency was £316,565.
The Department accepted the disqualification undertakings from the directors on 15 August 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 retain a total of £89,416 of monies due to Her Majesty’s Revenue and Customs consisting of £6,047 in respect of PAYE and £27,394 in respect of NIC for the years 2009/10 and 2010/11; and £55,975 in respect of VAT for the years 2008/09 to 2010/11 thereby funding substantially the company’s period of insolvent trading with the revenues so retained;
· allowing the Company to make a dividend distribution when there were not sufficient distributable reserves to do so.
The following additional matters of unfit conduct alleged by the Department in relation to Ivan James Dunlop and not disputed were:
· submitting a materially inaccurate Statement of Affairs;
· causing and permitting the Company to misuse a bank account held with the Ulster Bank by tendering 33 cheques with a total value of £61,240 without due regard to their being honoured on presentation in the period 14 October 2008 to 4 November 2010; and by providing insufficient funds to honour 24 standing orders and 19 direct debits with a combined total of £39,677 which were returned in the period 17 November 2008 to 22 October 2010.
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. The directors 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.