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Director disqualified for selling assets for his own benefit

Posted: 17th May 2018   In: Dispute Resolution, Corporate Commercial

A director of a haulage business has been disqualified for seven years after he sold company assets for his own benefit, leaving creditors unpaid.

Gilmour James McFarlane was a director of Garden Haulage Ltd. His company went into liquidation in 2015, owing £38,670 to creditors.

While the company was insolvent, McFarlane sold off assets including plant and machinery to a third party for a sum of £55,000 plus VAT.

He also settled a personally guaranteed loan to that party. These actions were to the detriment of HMRC and other creditors of the company.

An investigation by the Insolvency Service found that McFarlane failed to preserve or deliver adequate accounting records.

This meant it was not possible to establish the true financial position of the company, how other assets were dealt with and whether all sums due to the company were collected.

Robert Clarke, Group Leader of Insolvent Investigations North at the Insolvency Service, said: “The period of this disqualification reflects the fact that when a company fails to keep adequate financial records it is simply not possible to determine whether there has been other, more serious, impropriety in relation to the management of its affairs.

“Furthermore, directors who put their own personal financial interests above those of customers and creditors damage confidence in doing business and are corrosive to the health of the local economy.”

McFarlane’s disqualification means that during his disqualification he we will not be able to:

Please contact Neil O'Callaghan or Sarah Liddiard if you would like more information about the issues raised in this article or any aspect of insolvencies and company law.

 

Posted by: Neil O'Callaghan
Dispute Resolution
Luton Office