Maghera director agrees to disqualification

The Department of Enterprise, Trade and Investment (the Department) has accepted a disqualification undertaking for eight years from Michael Thomas Logue (36) of Urbalshinny Road, Maghera, County Londonderry in respect of his conduct as a director of Lomic Manufacturing Limited.

Proceedings against another Respondent are continuing.

Lomic Manufacturing Limited (the Company) carried on the business of manufacturing kitchens, bedroom units, reception areas and bars from June 2002 to March 2007 latterly from 89 Dowland Road Limavady. It went into liquidation on 16 August 2007 with estimated assets of £6,200, liabilities of £721,200 to non preferential creditors and an estimated deficiency as regards creditors of £715,000. After taking into account the losses incurred by members (shareholders, including the directors) of the company the total deficiency was £715,002.

The Department accepted the disqualification undertaking from Michael Thomas Logue on 28 January 2010 based on the following unfit conduct which solely for the purposes of the disqualification procedure was not disputed:

Failing to fully co-operate with the Official Receiver in contravention of Article 199(2) of the Insolvency (Northern Ireland) Order 1989 in that he failed to attend the Official Receiver’s office as requested;

Causing and permitting the Company to fail to pay £72,758.93 of debts properly payable to the Crown comprising £6,874.34 PAYE for the year 2005/06, £31,653.60 PAYE and £34,230.99 NIC for the year 2006/07;

Causing and permitting the Company to misuse bank accounts in Bank of Ireland and First Trust Bank, in that a total of nine cheques with a value of £68,256 were returned unpaid by Bank of Ireland in the period 6 February 2003 to 3 February 2005 and in the period 25 January 2005 to 2 February 2005, seven direct debits with a total value of £2,457 were returned unpaid. A total of 36 cheques with a value of £63,112 were returned unpaid by First Trust in the period 16 June 2005 to 21 April 2006 and in the period 17 June 2005 to 27 June 2006, six direct debits with a total value of £1,565 were returned unpaid and one Standing Order with a value of £420 was returned unpaid;

Causing and permitting the Company to fail to file annual accounts for the year ended 31 December 2005, and to fail to file accounts on time for the years ended 30 June 2003 and 31 December 2004;

Failing to co-operate with the Official Receiver in contravention of Article 111 of the Insolvency (Northern Ireland) Order 1989 in that he failed to file a Statement of Affairs for the Company at the date of Winding Up;

Attempting to put assets of the Company beyond the reach of the Official Receiver in that he offered assets to a value of £10,000 for private sale at a time when he had been informed that the Company was in liquidation and that he would be asked to account for all of its assets and he failed to disclose assets to a value of £200 which he was using for his personal benefit in a workshop he was operating.

There have been 23 directors disqualified in the financial year commencing 1 April 2009.

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. 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 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 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.
6. The period of disqualification commences at the end of the 21 days beginning with the day the disqualification undertaking was accepted by the Department.
7. For media enquiries contact DETI Press Office on 028 90529297. Out of office hours, please contact the Duty Press Officer via pager number 07699715440 and your call will be returned.