Rostrevor and Newry directors agree to disqualification

The Department of Enterprise, Trade and Investment (the Department) has accepted a disqualification undertaking for five years from James Curran (56) of Victoria Square, Rostrevor, County Down, in respect of his conduct as a director of S C Property Limited.

The Department has also accepted a Disqualification Undertaking for six years from Maurice Sheridan (39) of Daisy Hill Gardens, Newry, County Down in respect of his conduct as a director of the same company.

S C Property Limited (the Company) commenced trading on 31 July 2000, for the purpose of the purchase, development, letting and sale of residential and commercial properties and went into liquidation on 8 June 2006, with estimated assets of £5,000, estimated liabilities of £110,128 and an estimated deficiency as regards creditors of £105,128.

The Department accepted the disqualification undertakings from James Curran on 28 August 2008, and from Maurice Sheridan on 14 October 2008, based on the following unfit conduct which, solely for the purposes of the disqualification procedure, was not disputed:

reaching their fiduciary duty to the Company by allowing Maurice Sheridan to withdraw company funds in the sum of £109,486, in the form of loans, at a time when the Company could not afford to make these payments and in contravention of the Companies (NI) Order 1986, thereby contributing significantly to the failure of the Company;

Causing and permitting the Company to fail to pay £93,704.52 of debts properly payable to the Crown comprising outstanding PAYE and NIC of £6,365.52 and Corporation Tax of £42,500, for the period 2003/04 due to the Commissioners of Inland Revenue, and monies due to HM Customs & Excise in respect of VAT for the period 2003/04 of £44,839.00;

Causing and permitting the Company to misuse bank accounts in Bank of Ireland and Ulster Bank in that four cheques totalling £119,581.32, were dishonoured upon presentation at the Company’s account at Bank of Ireland during the period 17 July 2003 to 6 October 2003, and six cheques totalling £12,860.64 were dishonoured upon presentation at the Company’s account at Ulster Bank during the period 23 November 1999 to 11 April 2001;

Failing to prepare and file annual returns for the years ended 4 May 2002 and 4 May 2003 and being late in filing annual returns for the company, for the years ended 4 May 2000 and 4 May 2001.

In cases where a director offers a disqualification undertaking acceptable to the Department, thus avoiding a full hearing of the matter before the court, a shorter period of disqualification than would otherwise be appropriate is normally imposed.

The Department has accepted 18 Disqualification Undertakings and the Court has made an Order disqualifying one director in the financial year commencing 1 April 2008.

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 15 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 10 years reserved for particularly serious cases, six to 10 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 Tel: 028 90 548516.
7. The period of disqualification commences at the end of 21 days beginning with the day the Disqualification Undertaking was accepted by the Department.
8. For media enquiries, please contact DETI Press Office on 028 9052 9297. Outside office hours, please contact the Duty Press Officer via pager number 07699 715 440 and your call will be returned.