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Newry director disqualified by the court

Tuesday, 12 August 2008

James Linden, (29) of Drumbanagher Wall, Poyntzpass, Newry was disqualified for eight years on 4 July 2008, in the High Court, Belfast, in respect of his conduct as a director of Pro-Fit Trailers Limited

Pro-Fit Trailers Limited (the Company) carried on the business of manufacturing small trailers from Blackbridge Road, Poyntzpass, Newry and went into liquidation on 7 September 2006 with estimated assets of £75,950, estimated liabilities of £781,834.52 and an estimated deficiency as regards creditors of £705,884.52. After taking into account the losses incurred by members (shareholders, including the director) of the company, the total estimated deficiency was £850,884.52.

The matters of unfit conduct, alleged by the Department of Enterprise, Trade and Investment (the Department) in relation to James Linden in respect of his conduct as a director of the Company, were:

  • Failing to prepare and submit a Statement of Affairs for the Company;
  • Causing and permitting the Company to trade from 1 July 2005 to cessation of trading in August 2006 at a time when he knew or ought to have known that it was insolvent and when such trading was to the detriment of creditors;
  • Causing and permitting the Company to retain £181,075.04 of debts properly payable to the Crown comprising outstanding PAYE and NIC for the periods 2004/05, 2005/06 and 2006/07 of £161,049.09 and outstanding VAT for the period 2006/07 of £20,025.95 due to HM Revenue and Customs;
  • Causing and permitting the Company to misuse a bank account with the First Trust Bank, in that during the period April 2005 to July 2006, 267 cheques with a value of £592,612.71 were dishonoured upon presentation. Of the 267 cheques dishonoured when first presented, 18 cheques were dishonoured when presented for a second time.
  • Altering a cheque to the detriment of a creditor and failing to properly account for the proceeds after the cheque was encashed by himself;
  • Failing to file the Company annual returns made up to 28 March 2004, 28 March 2005 and 28 March 2006 with Companies Registry.

The Department has accepted ten Disqualification Undertakings and the Court has made 1 Disqualification Order in the financial year commencing 1 April 2008.

Notes to Editors:

  1. The Official Receiver, when a company is wound up by the Court, has a duty to investigate the causes of failure and report any 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. 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.
  4. The 2002 Order also allows directors, with 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.
  5. 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 02890 548516.
  6. The period of disqualification commences at the end of the 21 days beginning with the day the Order was made by the Court.
  7. For media enquiries please contact the DETI Press Office, telephone 028 9052 9297. Outside office hours please contact the Duty Press Officer via pager number 07699 715 440 and your call will be returned.