On Friday 1 October 2010, George Charles Taylor (“Mr Taylor”) of Arundel, West Sussex, was sentenced at Chichester Crown Court to a total of 16 months imprisonment in respect of offences he committed whilst acting as a director of two companies.
Commenting on the case Robert Peck, Official Receiver for Croydon, said: “This case shows the severe consequences awaiting company directors who abuse their position or disregard the insolvency laws in place to protect the public and businesses. The Insolvency Service has robust powers and we do not hesitate to use them as Mr Taylor found out.”
Mr Taylor was a director of Amalgamated Demolition Services Ltd which was wound up by the Brighton County Court on 24 April 2006. Following an investigation by The Insolvency Service, criminal proceedings were brought against Mr Taylor in respect of his roles in Amalgamated Demolition Services Ltd and Amalgamated Demolition and Asbestos Services Ltd.
A bankruptcy order was made against Mr Taylor on 16 January 2007. Mr Taylor acted as a director of Amalgamated Demolition and Asbestos Services Ltd despite being barred from doing so due to being an undischarged bankrupt. Also, following the winding-up of Amalgamated Demolition Services Ltd, Mr Taylor acted as a director of Amalgamated Demolition and Asbestos Services Ltd despite being prohibited from doing so because the name was so similar as to suggest an association with Amalgamated Demolition Services Ltd.
Mr Taylor informed Amalgamated Demolition Services Ltd’s major customer that the company had a new bank account and asked that payment for work done by Amalgamated Demolition Services Ltd be paid to the new account. The bank account details that Mr Taylor provided were in fact the bank account of Amalgamated Demolition and Asbestos Services Ltd and therefore Mr Taylor caused £22,795 that was due to Amalgamated Demolition Services Ltd to be diverted to Amalgamated Demolition and Asbestos Services Ltd.
Mr Taylor also failed to disclose to the Official Receiver that Amalgamated Demolition Services Ltd had two motor vehicles and an excavator that were subject to hire purchase agreements.
Mr Taylor was sentenced to: -
- Count 1 – 6 months (to run concurrently with counts 2 & 3)
- Count 2 – 6 months (to run concurrently with counts 1 & 3)
- Count 3 – 12 months (to run concurrently with counts 1 & 2)
- Count 5 – 4 months (to run concurrently with counts 6 & 7)
- Count 6 – 4 months (to run concurrently with counts 5 & 7)
- Count 7 – 4 months (to run concurrently with counts 5 & 6)
The sentences for counts 5, 6 & 7 are to run consecutively with the sentences for counts 1,2 & 3.
In separate action taken by the Official Receiver, Mr Taylor undertook to the Secretary of State not to act as a company director for a period of 8 years. The undertaking took effect on 12 June 2008.
Amalgamated Demolition and Asbestos Services Ltd and Amalgamated Demolition Services Ltd both traded from 5 Canons Way, Steyning, West Sussex BN44 3SS and carried out the demolition of buildings, especially those involving asbestos. Amalgamated Demolition Services Ltd owed £142,059 to creditors.
Notes to editors
1 Mr Taylor pleaded guilty to two offences and was found guilty of a further four. He was acquitted of a 7th offence. A copy of the indictment is available from The Insolvency Service Press Office. Mr Taylor pleaded guilty to counts 1 & 2; was found guilty of counts 3, 5, 6, & 7; and was acquitted of count 4.
2 An individual who is an undischarged bankrupt, or is subject to a directors disqualification order or undertaking, cannot act in the promotion, formation or management of a limited company without the permission of the Court.
3 What are Bankruptcy Restrictions? These are restrictions set out in insolvency law that the bankrupt is subject to until they are discharged from bankruptcy – normally 12 months and include that bankrupts:-
· must disclose their status to a credit provider if they wish to get credit of more than £500;
· who carry on business in a different name from the name in which they were made bankrupt, they must disclose to those they wish to do business with the name (or trading style) under which they were made bankrupt;
· may not act as the director of a company nor take part in its promotion, formation or management unless they have a court’s permission to do so;
· may not act as an insolvency practitioner, or as the receiver or manager of the property of a company on behalf of debenture holders;
· may not be a Member of Parliament in England or Wales.
4 What are Bankruptcy Restrictions Orders and Bankruptcy Restrictions Undertakings? If the Official Receiver considers that the conduct of a bankrupt has been dishonest or blameworthy in some other way, he (or she) will report the facts to court and ask for a Bankruptcy Restrictions Order (BRO) to be made. The court will consider this report and any other evidence put before it, and will decide whether it should make a BRO. If it does, the bankrupt will be subject to certain restrictions for the period stated in the order. This can be from 2 to 15 years.
The bankrupt may instead agree to a Bankruptcy Restrictions Undertaking (BRU) which has the same effect as an order, but will mean that the matter does not go to court.
5 When a company is wound-up, the directors of that company are barred from being a director of a new company which has the same or similar name. The purpose of this legislation is to avoid the same business being carried out by the same people, through a new company, in disregard to the claims of the creditors of the first company. Various exceptions can apply but are not applicable in this case.
6 Following a winding-up Order, a company director is legally obliged to make a full and true disclosure to the Official Receiver.
7 What is the role of the Official Receiver? When a court has made an insolvency order (a personal bankruptcy against an individual or a winding-up order against a company) the Official Receiver, a civil servant of The insolvency Service with wide ranging statutory powers to obtain information, is responsible for collecting and protecting any assets for the benefit of creditors. When the Official Receiver thinks there is cause to do so they can also investigate, in the public interest, the conduct and financial affairs of the bankrupt for the period leading up to the insolvency order being made.
8 The Insolvency Service administers the insolvency regime, investigating all compulsory liquidations and individual insolvencies (bankruptcies) through the Official Receiver to establish why they became insolvent. The Service also authorises and regulates the insolvency profession; deals with disqualification of directors in corporate failures; assesses and pays statutory entitlement to redundancy payments when an employer cannot or will not pay employees; provides banking and investment services for bankruptcy and liquidation estate funds; and advises ministers and other government departments on insolvency law and practice. Further information about the work of The Insolvency Service is available from http://www.insolvency.gov.uk
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