Mr Lawrence McGovern, director of Railtrades Ltd (Railtrades) has received a 6 year disqualification order for disposing of the companys assets worth an estimated 52,000 and paying almost that amount to a connected party.
Mr McGoverns disqualification from 15 December 2014 follows a disqualification order made in the County Court at Romford on 14 November 2014 by Deputy District Judge Dudderidge. The application on 28 May 2014 was by the Insolvency Service on behalf of the Secretary of State for Business, Innovation and Skills.
The investigation showed that Mr McGovern disposed of Railtrades Limiteds fixed assets with an estimated value of 52,875 and in addition paid connected parties a total of 51,900, at a time when the company was insolvent, to the disadvantage of the companys creditors.
Despite requests by the liquidator and the Insolvency Service has failed to provide evidence of what happened to the companys assets.
The assets were shown in Railtrades balance sheet at 30 April 2011 at a value of 71,875, and the Liquidator estimates that they would have been worth 52,785 at liquidation. There is no evidence of monies from a sale of assets being received into Railtrades bank and account and Mr McGovern has failed to provide details of who he sold the assets to.
Mr McGovern caused Railtrades to enter into 51,900 of transactions to the detriment of creditors in that on 01 May 2012, at a time when Railtrades was insolvent, having ceased trading, and after the presentation of a winding up petition on 23 April 2013, he made payments of :-
23,600 to a company of which he had previously been company secretary and which a family member was to be appointed director on 22 June 2012
13,000 to that same family member, and
15,300 to another family member.
Commenting on the disqualification, Melissa Davies, an investigator with the Insolvency Services Company Investigations team, said:
Mr McGoverns explanation to the liquidator with regard to the sale of Railtrades assets was that they were sold in September 2011 and yet he informed the Insolvency Service that the company was unable to continue trading after the disposal of assets.
These explanations are conflicting as the company continued to trade until April 2012. With regard to the 23,600 paid to a connected company, Mr McGovern denied that there was any such connection but interrogation of the computerised accounts contradicted this, resulting in his disqualification.