Belfast director agrees to disqualification

The Department of Enterprise, Trade and Investment (the Department) has accepted a disqualification undertaking for five years from Colleen Bennett (48) of Rocky Road, Gilnahirk, Belfast in respect of her conduct as a director of Lucy (NI) Limited, (the Company).

The Company operated a restaurant and bar in the Odyssey Arena in Belfast and went into liquidation on 29 December 2006 with estimated assets of £14,742, liabilities of £187,550 and an estimated deficiency as regards creditors of £172,808. After taking into account the losses incurred by members (shareholders, including the directors) of the Company the total estimated deficiency was £172,810.

The Department accepted the disqualification undertaking from Colleen Bennett on 2 January 2009 based on the following unfit conduct which solely for the purposes of the disqualification procedure was not disputed:

• Causing and permitting the Company to be financed by the retention of £52,245.42 of monies properly payable to the Crown in respect of PAYE, NIC and VAT;
• Failing to ensure that the Company’s transactions with another business were properly accounted for;
• Failing to keep proper books and records in that the Company’s Creditors’ Ledger was not maintained properly;
• Failing to cooperate with the Liquidator, in that she failed to deliver up the following information;
• a full account of what her debt of £27,400 on the statement of affairs represented.
• the name, address and telephone number of the accountant she engaged to resolve the credit card transactions and also the results of his examination.
• details of how the calculations for £29,000 in credit card repayments was arrived at.
• Failing to ensure that Lucy (NI) Limited’s statutory records were maintained, preserved and / or delivered up contrary to the provisions of the Companies (NI) Order 1986.

The Department has accepted 22 Disqualification Undertakings and the Court has made two Disqualification Orders in the financial year ending 31 March 2009.

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 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 the DETI Press Office, telephone 028 9052 9297. Out of office hours, please contact the Duty Press Officer via pager number 07699 715 440 and your call will be returned.