11 March 2008 - Antrim and Glengormley directors disqualified by the court

Michael Robert Andrew McCrea (39) of Queens Park, Glengormley, Newtownabbey, and Veronica Yvonne Kidd (51) of Carnbeg Avenue, Kilbegs Road, Antrim, were disqualified for eight years and five years respectively on 13 February 2008, in the High Court, Belfast, in respect of their conduct as directors of the same company.

First Alert Security Limited ("the Company") carried on the business of providing security services, mobile patrols, alarm responses, security consultancy etc from 1 February 2004 to 8 July 2005, initially from rented premises at 39B Glen Road, Belfast and later from Unit 11, The Ferguson Centre, Manse Road, Newtownabbey, and went into liquidation on 8 September 2005, with no known assets; estimated liabilities of £8,804 to Preferential Creditors; estimated liabilities of £180,663 to Non Preferential Creditors and an estimated deficiency as regards creditors of £189,467. After taking into account the losses incurred by members (shareholders, including the directors) of the company, the estimated total deficiency was £189,468.

The matters of unfit conduct, alleged by the Department of Enterprise, Trade and Investment (the Department) in relation to Raymond Johnston, Michael Robert Andrew McCrea and Veronica Yvonne Kidd in respect of their conduct as directors of First Alert Security Limited and accepted by the Court included:

• Failing to submit a Statement of Affairs in respect of the Company;
• Failing to ensure that the Company's annual accounts were prepared and filed;
• Failing to account for company funds to the value of £252,559.68;
• Causing and permitting the Company to retain £172,639 in respect of PAYE/NIC and VAT not paid over to the Crown;
• Failing to maintain and/or preserve or deliver up full accounting books and records and statutory records for the Company.

An additional matter of unfit conduct, alleged by the Department and accepted by the Court in relation to Veronica Yvonne Kidd and Michael Robert Andrea McCrea was that they permitted a disqualified director and bankrupt to act as Director of the Company.

A further matter of unfit conduct, alleged by the Department and accepted by the Court in relation to Veronica Yvonne Kidd and Raymond Johnston was that they misappropriated company funds to the detriment of creditors to the value of £36,050.37. The Master stated that this was a serious aspect to the case.

It was further alleged by the Department and accepted by the Court that Raymond Johnston acted in contravention of Article 3(1) of The Company Directors Disqualification (NI) Order 2002 by acting as a Director whilst disqualified without the permission of the Court. The Master in her Judgement said that the fact that Raymond Johnston acted in breach of the Disqualification Order, and whilst he was bankrupt, was the most serious aspect of this case.

The Department has accepted 22 Disqualification Undertakings and the Court has made Orders disqualifying 18 directors in the financial year commencing 1 April 2007.

Notes to Editors:

1. The Official Receiver, when a company is wound up by the Court, has a duty to investigate the causes of failure and report any 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 9054 8516.
7. The period of disqualification commences at the end of 21 days beginning with the day the Order was made by the Court.
8. For media enquiries contact DETI Press Office on 028 9052 9604.
9. Outside office hours, please contact the Duty Press Officer via pager number 07699 715 440 and your call will be returned.