Insolvency Service (National): Directors of lap dancing club and cheap goods store poleaxed following Insolvency Service investigation

Two west Yorkshire based company directors, one the director of a chain of lap dancing clubs and the other a director of a chain of cheap goods stores, have been disqualified from being company directors following an investigation by the Insolvency Service.

Mr Matthew David Norton Haycox, of Alwoodley, Leeds who ran The Provocative Group Limited (Provocative), a string of lap-dancing clubs trading as Wildcats, has signed a disqualification undertaking banning him from managing, controlling or being a director of any company until 2022 (12 years). The disqualification of Mr Haycox ,who was also the majority shareholder of Saltacres Limited begins on 11 October 2010.

The Provocative Group Ltd commenced trading in March 2004 and grew to run clubs in Barnsley, Blackpool, Birmingham, Harrogate, Huddersfield, Leeds and Wakefield. All seven of Mr Haycox’s clubs were placed into administration on 12 September 2008, owing creditors an estimated £3 million.

Nicholas Justin Raphael Warner, the Leeds based director of Saltacres Limited (Saltacres), has also signed an undertaking banning him from being a director or in anyway managing or controlling any company until 2018 (seven years). Saltacres, which traded from stores in Lancashire and Yorkshire under the name Waremart, was placed into Creditors Voluntary Liquidation on 29 September 2008, with an estimated total deficiency of £2,700,000.

Insolvency Service investigators found that in September 2008 Mr Haycox and Mr Warner entered into trading transactions knowing that their respective companies were insolvent and that they could not pay for the goods they ordered.

The investigation found that in early September 2008 Provocative ordered two lorry loads of chocolate, from a Swiss supplier and sent them a cheque for £52,585 in respect of a 50% down payment for goods. At the time there were insufficient funds in his company’s bank account to honour the payment.

Then, on 12 September, the date of Administration, Mr Haycox issued another cheque for £11,415 to ‘pay’ the shipping agent for the Swiss order in respect of customs charges.

On receipt of the cheques the Swiss creditor shipped the goods and the shipping agent released the two truck loads of goods which were delivered to a business park not connected to Provocative. The goods were immediately loaded onto another vehicle and could not be traced by the administrators.

N.B In Switzerland it is illegal to issue cheques with funds unavailable, therefore the supplier dispatched the order in the expectation that the cheque would clear.

Also in August and September 2008 Mr Haycox caused Provocative and another company, Provocative Leisure (Harrogate) Limited, to order goods totalling £490,588, which were immediately sold to Saltacres, when he knew or ought to have known, that Provocative and Saltacres would be unable to pay for them.

Investigators also found, and Mr Haycox did not dispute, that on 16 April 2008 he entered into a chattel mortgage in respect of a BMW 5 series motor vehicle with a cash price of £54,499, which was already the subject of a hire purchase agreement. As a result of this when the vehicle was repossessed the second mortgagee had to refund the proceeds of sale of £12,600 to the original finance company, and was left with an unsecured loss of £36,691.

In respect of Mr Warner, investigators found, and he did not dispute that he:-

• caused Saltacres to enter into transactions, at an unreasonable risk, to the detriment of Provocative and Harrogate by receiving goods totalling £490,588 during the period 31 August 2008 – 26 September 2008, which at the time Saltacres had no realistic prospect of being able to pay;
• failed to deliver to the liquidator any records to verify the disposal of stock received or held after 28 August 2008 totalling at least £467,832; and
• was unable to establish the true and full value of any assets held by, or monies due to Saltacres at liquidation.

Mr Warner’s disqualification began on 10 September 2010.

Commenting on this complex investigation Vicky Bagnall, Director of Investigations for the Insolvency Service’s Companies Investigations Team, Manchester, said:

“It is clear that both of these reckless directors went about their trading activities, collaborating together. In the full knowledge that their businesses were heading for formal insolvency they ordered hundreds of thousands of pounds of goods that they knew or should have known that they could not pay for. Other directors and members of the public should be reassured that The Insolvency Service works hard to remove dishonest and irresponsible people from the business environment to keep the UK a good place to do business.”

Members of the public who think they know of a person who is acting in breach of a Director Disqualification Order or Undertaking can report them to The Insolvency Service Enforcement Hotline on 0845 601 3546.

Notes to editors

1 Company Investigations, a part of The Insolvency Service carries out confidential enquiries on behalf of the Secretary of State for Business, Innovation and Skills (BIS).

2 Without specific permission of a court, a person with a Company Director Disqualification, including Undertakings, cannot:-

act as a director of a company; take part, directly or indirectly, in the promotion, formation or management of a company; be a liquidator or administrator of a company; or be a receiver or manager of a company’s property.

Further information on director disqualifications and restrictions can be found athttp://www.insolvency.gov.uk/directordisqualificationandrestrictions/whatisdisqualification.htm

3 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

Contacts

NDS Enquiries 
Phone: For enquiries please contact the issuing dept 
ndsenquiries@coi.gsi.gov.uk