Director disquailification

[careerman]

Good morning all,
I am hoping individuals on here are able to advise/assist on my question.

There is a possibility i may be disqualified as a director after my company failed in June 2011.

My question is i now work as a sales manager for a company and i am worried about the following statement on the Government web site which is "be concerned in or taking part in the promotion, formation or management of a company".

Should this include being a sales man i will once again be unemployed, other than having the title of regional sales manger i have no financial control in any of the companies activities just a salesman.

Am i panicking over nothing or is it as i fear i will loose my job.

Kind regards

Careerman

 

[Billmccallum]

Don't panic, you probably have nothing to worry about, just because a company fails does not mean you will get disqualified, this is usually a drastic measure taken where a director has been negligent or fraudulent.

I know of at least two company directors who have been convicted of fraud, but not disqualified.

 

[careerman]

Thank you bill for the prompt response i really appreciate it, i may be worrying over nothing but if disqualified for some reason would a salesmans position be identified as a restricted employed position.

Thanking you in advance.

Careerman

 

[Scalloway]

I woukd think that the measure is aimed at directors, not managers.

 

[Spongebob]

A 'sales manager' would certainly not fall into the category "concerned in or taking part in the promotion, formation or management of a company".

Even if your role involves managing a number of salesmen, this does not constitute being involved in the management of the company. Most 'sales managers' are nothing more than reps. If you were the 'Sales Director', clearly things would be different.

Anyway, disqualification is extremely rare and normally reserved for real crooks. It is highly unlikely to happen; why do you think it might?

 

[careerman]

Anyway, disqualification is extremely rare and normally reserved for real crooks. It is highly unlikely to happen; why do you think it might?

We were a small company and collapsed owing £87K we appointed liquidators but during the creditors meeting the largest creditor of £38K attended the meeting with their own liquidators and managed a case transfer.

From that day on we have received a letter every 2 weeks demanding more information along with threats of different action. We handed all company information over as required but still they keep hounding us.

This has now been going on for 2 years and the threat are getting worse with comments such as "you will sell your house and release equity to pay creditors" and "we have applied for director disqualification". I removed 6K from the company bank account 3 weeks before failure for future living expenses as advised by our liquidator.

They claim this is a fraud etc and must repay all monies owed plus they say the accounts handed over are not complete, which they were but we have no proof as they took all the information.

The creditors solicitors are very demanding and very aggresive towards us and it looks like it will never end.

This is what i am worried about the constant threats of court and they informed me they would make me bankrupt, not nice at all.

 

[Chris Ashdown]

Write back you consider their continued contact with you as harrasement and request it stops immediatly, otherwise you will have no other option but to complain to the law society and police

 

[figurewizard]

Careerman - Given the number of threats you have received and the fact that this has been going on for two years, if it really was their intention to take you to court they would have done so long before now.

 

[Mitcht]

Careerman - As a director of a company that has entered liquidation you have a legal obligation to co-operate with the liquidator but if you believe you have been co-operating and you now believe the actions of the liquidator amount to harassment, I suggest you formally complain to the liquidator's regulatory body, details of which are required to be shown on the correspondence you have received from him.

The decision to prosecute to have a person disqualified from acting as a director is not made by the liquidator. The liquidator submits a report with his opinion as to whether or not a person is fit to act as a director to the Department for Business, Innovation & Skills (the old DTI). It is they who decide whether or not to prosecute and they have two years in which to do so. If the liquidation was more than two years ago then they are not going to prosecute.

From the limited information you have provided, I think the liquidator may have a claim against you for "Preference" (not fraud) in that you took £6,000 out of the company three weeks before liquidation for your own use rather than using the money to pay your creditors. I think whoever told you to do this was wrong. This action, however, does not make you liable for all of the debts of the company.

If the liquidators and the solicitors have been working on this for over two years, I bet they have run up costs of more than £6,000 which is why they are being so aggressive. Depending on the value of the company assets at the date of liquidation, it is possible that if the liquidator wishes to commence proceedings he will have to fund the action personally unless the creditor who appointed him is prepared to fund it. In my experience both are unlikely for the amount invloved but this is a judgement you will have to make. As has been said before, if they have not started proceedings after two years, will they ever?

 

[careerman]

Thank you all for your comments on said problem, i will have to wait and see what happens especially as it has been over 2 years. I have no intention of starting a business again so the Director ban should not pose a problem. Yes the money recovery could be a problem but i'll wait and see.

Once again thank you all.

 

[Spongebob]

I removed 6K from the company bank account 3 weeks before failure for future living expenses as advised by our liquidator.

Do you have any evidence of this advice?

If the advice was given verbally, did you take contemperaneous notes at the meeting?

If the liquidator wishes to pursue you for the six grand you took out, they will have to take you to court where they will have to prove that the debt exists. If you can demonstrate that you were acting upon the advice of a licensed insolvency practitioner then proving the debt will be very difficult for them.

Write to them rejecting completely their claim and state categorically that you have complied completely with your statutory obligations and will not enter into any further communication on the matter.


PS Do not refer to your chosen IP as your 'liquidator'. They were never your liquidator, simply the insolvency practitioner you consulted with a view to being appointed liquidator.

 

[Mitcht]

Spongebob - re your PS to careerman I beg to differ. Careerman said the alternative liquidator was appointed at the creditors' meeting and therefore his selected insolvency practitoner was appointed as liquidator by the shareholders before the creditors' meeting. It may only have been for 30 minutes but careerman is right to call the insolvency practitioner the liquidator.

 

[Alan R Price]

We were a small company and collapsed owing £87K we appointed liquidators but during the creditors meeting the largest creditor of £38K attended the meeting with their own liquidators and managed a case transfer.

From that day on we have received a letter every 2 weeks demanding more information along with threats of different action. We handed all company information over as required but still they keep hounding us.

The liquidator he is entitled to ask you questions and require explanations arising out of his investigations into the company's affairs and you are obliged to cooperate fully. But if you have handed over all the company's books and records to him I cannot see what further documentation he could reasonably require. If you have told him you have handed over everything and answered all his questions, tell him you will consider his repeated requests to be harassment and threaten to report him to his licensing body. If he believes you are not cooperating he should apply to court to have you examined on oath under s236 of the Insolvency Act 1986.

This has now been going on for 2 years and the threat are getting worse with comments such as "you will sell your house and release equity to pay creditors" and "we have applied for director disqualification". I removed 6K from the company bank account 3 weeks before failure for future living expenses as advised by our liquidator.

On what grounds is he suggesting you should use your own assets to pay creditors? Has he made a claim against you for wrongful trading, misfeasance or anything else? I would be interested to hear more details.

As for the assertion that "we have applied for director disqualification", this is utter nonsense. Only the secretary of state can apply for disqualification and any such application must be made to court within two years of the company going into liquidation. The liquidator has a duty to report to the SoS where he believes disqualification is appropriate however his report is confidential and he would have no business disclosing it to a third party, particularly you. This sounds like the worst sort of bullying/harassment by the liquidator and if all is as you say, he could well be guilty of serious professional misconduct.

Regrettably, I think you are probably liable to return the £6,000 you had three weeks before the company went into liquidation. If your nominee liquidator told you to take the money he is probably guilty of misconduct as well because there are very few situations I can think of in which such advice would be appropriate.

They claim this is a fraud etc and must repay all monies owed plus they say the accounts handed over are not complete, which they were but we have no proof as they took all the information.

The creditors solicitors are very demanding and very aggresive towards us and it looks like it will never end.

This is what i am worried about the constant threats of court and they informed me they would make me bankrupt, not nice at all.

They can only make you bankrupt if there are valid claims against you (like the £6,000) and you fail to pay up. I suggest you take specialist advice from a lawyer or insolvency practitioner so you know how to respond properly to the liquidator and what your risks and obligations actually are.

 

[mhall]

Sometime attack is the best form of defence. I can almost guarantee that if you follow the advice above, you will not hear anything from them. Whilst you sit there and "see what happens" you can expect to continue to get letters.

 

[careerman]

As you can see the last date on the previous post back in October 2013. Nothing really has changed my old company is still listed as in Liquidation. The latest letter has asked for my signature on the minutes of the meetings on appointing the new IP. No legal action has taken place but how long will this last which first started in 2011 and its now 2015. The threatening solicitors letters have now stopped but I'm wondering will this situation ever end.
Surely this is a record for none closure of a liquidation, if not what are they waiting for?

 

[Chris Ashdown]

Had you passed over control to the first ip before the meeting if so why should you sign anything as the ip was running the company and you had been discharged as a director

Get advice before you sign anything