31 March 2008 - Dundalk directors agree to disqualification

The Department has also accepted a disqualification undertaking for six years from Siobhan Murray (48) of the same address in respect of her conduct as a director of the same companies.

Gannon Limited carried on business as a clothes retailer from two concession shops in Bangor and Cookstown, and from a store at 12 Bow Street Mall, Lisburn and went into liquidation on 22 September 2005 with assets of £50,000; estimated liabilities of £325,139 to non preferential creditors and an estimated deficiency as regards creditors of £275,139. After taking into account the losses incurred by members (shareholders, including the directors) of the company, the total estimated deficiency was £275,141.

Skey Limited traded as a clothes retailer from a unit in Lisburn Square, Lisburn and went into liquidation on 6 October 2005 with assets of Nil; estimated liabilities of £92,001 to non preferential creditors and an estimated deficiency as regards creditors of £92,001. After taking into account the losses incurred by members (shareholders, including the directors) of the company, the total estimated deficiency was £92,003.

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 Terence Murray and Siobhan Murray on 28 February 2008, based on the following unfit conduct which, solely for the purposes of the disqualification procedure, was not disputed:

Gannon Limited

• Failing to act in the best interests of the company by failing to have appropriate separation between the funds and assets of the company and associates.
• Causing and permitting Gannon Limited to be financed by the non-payment of £47,293.31 of debts properly payable to HM Revenue & Customs being £2,087.98 of PAYE for the year 2004/2005 and 2005/2006, £3,459.78 of National Insurance Contributions (NIC) for the years 2004/2005 and 2005/2006 and VAT of £41,745.55 for the years 2004/2005 to 2005/2006;
• Failing to maintain and/or preserve or deliver up sufficient accounting records to fulfil the requirements of Article 229(1) of the Companies (Northern Ireland) Order 1986 and failing to maintain and/or preserve or deliver up the statutory records to fulfil the requirements of Articles 296, 360 and 390 of the Companies (Northern Ireland) Order 1986;
• Failing to ensure that accounts for the years ended 31 December 2002 and 31 January 2004 were filed with Companies Registry within the prescribed time period in accordance with Article 235 of the Companies (Northern Ireland) Order 1986 as amended by Article 6 of the Companies (Northern Ireland) Order 1990;
• Failing to ensure that the annual returns for the year ended 13 December 2003 and 13 December 2004 were filed within the prescribed time period in accordance with Article 371(1) of the Companies (Northern Ireland) Order 1986.
• The following is an additional matter of unfit conduct which, solely for the purposes of the disqualification procedure, was not disputed by Siobhan Murray:
• Failing to ensure that the company had at least one director, a secretary, and that a sole director was not also the secretary in accordance with Articles 290 and 291 of the Companies (NI) Order 1986.

Skey Limited

• Causing Skey Limited to continue to trade after they knew the company was insolvent to the detriment of creditors;
• Causing and permitting Skey Limited to be financed by the non-payment of £11,209.94 of debts properly payable to HM Revenue & Customs for VAT for the years 2003/2004 to 2004/2005;
• Failing to maintain and/or preserve or deliver up sufficient accounting records to fulfil the requirements of Article 229(1) of the Companies (Northern Ireland) Order 1986 and failing to maintain and/or preserve or deliver up the statutory records to fulfil the requirements of Articles 296, 360 and 390 of the Companies (Northern Ireland) Order 1986;
• Failing to ensure that accounts for the year ended 31 December 2002 were filed with Companies Registry within the prescribed time period in accordance with Article 235 of the Companies (Northern Ireland) Order 1986 as amended by Article 6 of the Companies (Northern Ireland) Order 1990.

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. Terence Murray and Siobhan Murray are husband and wife.
2. 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.
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. 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.
5. 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.
6. 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.
7. 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.
8. The period of disqualification commences at the end of 21 days beginning with the day the Undertaking was accepted by the Department.
9. For media enquiries contact DETI Press Office on 028 9052 9604. Outside office hours, please contact the Duty Press Officer via pager Number 07699 715 440 and your call will be returned.