Two company directors of a Rotherham construction firm specialising in ceilings and partitions have been disqualified from acting as directors for a period of six years each after taking over 375,000 from the company thereby causing its insolvency. This follows an Investigation by The Insolvency Service.
Peter Baker 44 and 42 year old Dean Longden were directors of First Fix Ceiling & Partitions Ltd which was placed into creditors voluntary liquidation on 17 February 2011.
The investigation showed that in October 2010, following the closure of a number of trade clients, Mr Baker and Mr Longden sought advice from a firm of insolvency practitioners and were advised that their company was solvent, with liabilities of approx 170,000 and assets of 462,000. The latter consisted mainly of money in the company bank account.
The investigation also showed that between 20 October 2010 and 17 February 2011, the date the company was placed into voluntary liquidation, Mr Baker withdrew over 190,000 and Mr Longden over 185,000, including 60,000 each on 26 January 2011.
Creditors in the voluntary liquidation totalled 253,865 of which 216,693 were owed to HM Revenue & Customs.
The liquidator has realised funds totalling 114,237 of which 90,000 are repayments made by Mr Baker and Mr Longden
Clive Tranter, Head of the Company Investigation North East team based in Leeds said: -
Mr Baker and Mr Longden have presided over a company that in just three months went from being capable of paying its liabilities, to one which was insolvent, by virtue of the directors withdrawing company funds.
The directors claimed that they were acting on professional advice but their undertakings indicate they have accepted their actions were not those of responsible directors.
The public can be assured that The Insolvency Service will seek to take action against such directors and aims to protect the public and public finances from future such abuses.