21 July 2008 - Lisburn Director agrees to disqualification

Network Neighbourhood Limited (the Company) carried on the business of developing, installing and maintaining computer hardware and software from Units 2-3 Ravenhill Business Park, Ravenhill Road, Belfast and went into liquidation on 29 November 2005 with estimated assets of £22,000 and liabilities of £462,191 and an estimated deficiency as regards creditors of £440,191. After taking into account the losses incurred by members (shareholders, including the directors) of the company the estimated total deficiency was £446,441.

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 undertaking from Gregory Stewart Warner on 24 June 2008 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 £179,958.51 of debts properly payable to the Crown;
• Causing and permitting the Company to fail to maintain and/or preserve proper accounting records;
• Causing and permitting the Company to misuse an account with the Ulster Bank Limited in that the Company exceeded the agreed overdraft facilities between 2 January 2002 and 15 November 2005 on 245 occasions, and in that during the period from 15 September 2005 to 18 November 2005, eight cheques totalling £21,599.56 were dishonoured, 13 direct debits totalling £4,896.14 were returned unpaid, and one of those returned cheques in the sum of £1,495.90 was presented and returned unpaid on a second occasion;
• Causing and permitting the Company to fail to ensure that the Annual Returns in respect of the periods made up to 13 November 1999 and 13 November 2000 were filed on time, and that the Annual Returns for the period made up to 13 November 2002, 13 November 2003 and 13 November 2004 were filed, with Companies Registry;
• Failing to ensure that statutory records for the Company were preserved or, if they were preserved, he failed to deliver them up to the liquidator.

The Department has accepted ten Disqualification Undertakings 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 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 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.
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 9052 9297. Outside office hours, please contact the Duty Press Officer via pager number 07699 715 440 and your call will be returned.