A couple have each been banned from acting as directors for seven years following an Insolvency Service investigation.
Christopher Howarth and Carol Howarth, both aged 49 and directors of C&C Wedding Company Limited, a bridal wear and suit hire business in Nuneaton, gave undertakings at the end of September to be disqualified from 19 October 2011. The move prevents them from in any way managing or controlling limited companies.
The investigation by the Insolvency Service, on behalf of the government, found that Mr and Mrs Howarth continued to accept pre-payments and deposits from brides and grooms for bridal wear and wedding suit hire, totalling at least £35,976, despite the company being insolvent and unable to fulfil these orders.
They failed to complete orders for the delivery of wedding dresses and other bridal wear to at least 76 brides, grooms or members of their wedding parties.
Ken McEwan, head of Gregg Latchams’ Litigation department, said: “This case acts as a valuable reminder that company directors whose conduct is unacceptable can face very lengthy periods of disqualification, resulting in a serious and long-term impact on their businesses and future prospects.
“For directors who find themselves in this position, expert legal advice is essential. We can advise on the most appropriate way forward, which may include defending the proceedings or making a voluntary undertaking, which has the same effect as disqualification, with the director usually accepting a shorter disqualification period than was being sought.”
Disqualification orders against directors, for a period of between two and 15 years, may be sought by the Insolvency Service after a company has become insolvent. Conduct that can lead to disqualification includes continuing to trade to the detriment of creditors when the company was insolvent and failure to file tax returns and pay tax.
The courts can also make disqualification orders, for example under certain criminal offences connected with the Companies Acts legislation.
For more information, please contact Ken McEwan.
