Belfast directors agree to disqualification

The Department of Enterprise, Trade and Investment has accepted a disqualification undertaking for six years from Arthur John Patterson (65) of Old Hilltown Road, Shaws Bridge, Belfast, in respect of his conduct as a director of ECAP Coatings Limited.

The Department has also accepted a disqualification undertaking for six years from John David Patterson (71) of Wallasey Park, Belfast, in respect of his conduct as a director of the same company.

The Department has also accepted a disqualification undertaking for three years from Paul McAlister (52) formerly of Waterloo Gardens, Belfast, in respect of his conduct as a director of the same company.

ECAP Coatings Limited carried on business in the areas of protective coatings, waste reduction, land remediation and specialised cleaning from 3 West Bank Drive, Belfast and went into liquidation on 13 January 2004 with assets estimated to realise £12,101; liabilities of £291,572; and a deficiency as regards creditors of £279,471. After taking into account the losses incurred by members (shareholders, including the directors) of the company the total deficiency was £379,471.

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 accepted the disqualification undertakings from Arthur John Patterson and John David Patterson on 24 April 2007 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 non-payment of £60,585.22 properly payable to the Crown for PAYE, NIC and VAT;
• Causing and permitting the Company to misuse an account with the Ulster Bank in that during the period 8 January 2003 to 29 October 2003, 24 cheques with a total value of £44,010.66 were tendered to creditors, without due regard to them being honoured upon presentation;
• Failing to co-operate fully with the liquidator.

The Department accepted the disqualification undertaking from Paul McAlister on 30 March 2007 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 non-payment of £60,585.22 properly payable to the Crown for PAYE, NIC and VAT;
• Causing and permitting the Company to misuse an account with the Ulster Bank in that during the period 8 January 2003 to 28 August 2003, 18 cheques with a total value of £25,730.45 were tendered to creditors, without due regard to them being honoured upon presentation;

The Department has accepted four Disqualification Undertakings and the Court has made one Disqualification Order in the financial year commencing 1 April 2007.

Notes to Editors:

1. Arthur John Patterson and John David Patterson are brothers.

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. 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 to10 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 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 02890 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 contact DETI Press Office on 028 90 529604.