Defence Of A 12-Year Director Disqualification Ban

• Published date: 11 January 2024
• Subject Matter: Insolvency/Bankruptcy/Re-structuring, Insolvency/Bankruptcy
• Law Firm: Higgs LLP
• Author: Suky Mann

Suky Mann defends a client facing a 12-year ban and compensation order pursued by the Insolvency Service.

Despite facing a top-bracket disqualification period, all allegations were abandoned by the Insolvency Service after evidence that a professional advisor made the application.

Background

Facing a significant period of disqualification, our client instructed Suky in what he thought was the last chance saloon in defending a threatened director disqualification ban of 12 years and a compensation order of '46,000. Having already instructed a solicitor to deal with the investigation, the client felt that little or no progress was being made and was resigned to giving up the fight. However, a chance search on Google led him to Suky.

Our client faced allegations that he had overstated his company's turnover figures to obtain a bounce-back loan that the company was not entitled to. Further, he went on to use those funds for improper purposes.

The legal challenge

Suky demonstrated with relative ease that the bounce-back loan was used for the company's economic benefit, but the circumstances giving rise to the application itself were somewhat more troublesome.

With the benefit of legal advice and hindsight, our client accepted that the turnover had been overstated, but it transpired that he had not completed the application.

In a surprising turn of events, we discovered that our client's accountant used inaccurate figures to apply for the bounce-back loan on our client's behalf. The same accountant had also been instrumental (for a charge) in several applications for other companies.

Our client faced an uphill battle persuading the Insolvency Service of the accountant's involvement. The accountant immediately denied it, and the Insolvency Service quickly discounted our client's explanations. Whilst the accountant had been wise enough to minimise the evidence of his involvement in the process, Suky was undeterred and set about building a case against the accountant, unearthing enough evidence to undermine the accountant's position.

Not only was Suky able to provide evidence that the accountant made the application and did so without our client's approval of the turnover figures, but he had also been heavily involved in assisting our client in responding to the Insolvency Service's early enquiries. Suky's approach allowed her to provide evidence that the accountant drafted the responses provided by her...