Belfast director disqualified by the court

Gerard Corrigan of Drummond Manor, Finaghy Road South, Belfast was disqualified for seven years on the 31 May 2007, in the High Court, Belfast, in respect of his conduct as a director of Home Developments Limited.

Home Developments Limited carried on the business of building contractors and went into liquidation on 21 July 2004 with estimated total assets available for preferential creditors of £30,342 an estimated deficiency as regards creditors of £490,660 leaving an estimated total deficiency as regards members of £490,662. Inland Revenue and HM Customs and Excise submitted claims totalling £260,501 resulting in the re-statement of the estimated total deficiency as regards creditors of £533,540 and as regards members of £533,542.

The matters of unfit conduct, alleged by the Department of Enterprise, Trade and Investment (the Department) in relation to Gerard Corrigan in respect of his conduct as a director of Home Developments Limited were:

• Causing and permitting the Company to trade from 30 November 2002 to November 2003, at a time when he knew, or ought to have known it was insolvent and when such trading was to the detriment of creditors;
• Failing to co-operate with the office holder;
• Causing and permitting the Company to be financed by the retention of £224,714.59 of debts properly payable to the Crown in respect of PAYE, NIC, Corporation Tax and VAT;
• Causing and permitting the Company to misuse an account with the Ulster Bank in that during the period from 7 June 2000 to 11 March 2004, 107 cheques with a monetary value of £136,979.91 were tendered to creditors without due regard to their being honoured upon presentation;
• Failing to deliver up accounting records for the Company to the liquidator;
• Failing to ensure that Annual Returns made up to 8 March 1998, 8 March 1999 and 8 March 2001 were filed on time and that Annual Returns made up to 8 March 2000, 8 March 2002, 8 March 2003 and 8 March 2004 were filed with the Registrar of Companies;
• Failing to file Annual Accounts for the year ending 31 March 1998 on time and failing to file accounts for the years ending 31 March 2000, 31 March 2001, 31 March 2002 and 31 March 2003 with the Registrar of Companies;
• Failing to ensure that statutory records for the Company were preserved, or if they were preserved, failing to deliver them up.

The Court stated that clearly this was a serious case with a large number of instances of default by Gerard Corrigan established by the Department and therefore the appropriate period of disqualification was seven years.

The Department has accepted 13 Disqualification Undertakings and the Court has made nine Disqualification Orders in the financial year commencing 1 April 2007.

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. 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 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.
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 2 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.
6. The period of disqualification commences at the end of 21 days beginning with the day the Order was made by the Court.
7. For media enquiries please contact Lesley Dempster in the DETI Press Office, telephone 028 9052 9297 or 07866 847919.
8. Outside office hours, please contact the Duty Press Officer via pager number 07699 715 440 and your call will be returned.