Director's Desk

The Director's Friend – Director disqualification and Compensation to Creditors(s)

In a my blog dated 21 December 2016 (see: http://www.breezeandwyles.co.uk/more-bad-news-for-directors-and-their-personal-liability/) I talked about the new risk to directors in the context of Director Disqualification investigations being that the Secretary of State can now also seek compensation from the director(s) where loss has been caused to one or more creditors of the company. That is for the benefit for that creditor or creditors.

AN UPDATE:

In a magazine aimed at Licensed Insolvency Practitioners (Dear IP) the Secretary of State (that is the Insolvency Service (the ‘IS’)) set out in broad terms what their approach is likely to be.

THE DIRECTORS EXPOSURE:

It would appear that the director at most risk of being subject to disqualification and concurrent compensation proceedings for personal liability is where:

  • Other remedies have either failed or for, whatever reason, are not available. For example, the Liquidator or Administrator failed or was for financial, legal or factual reasons unable to bring a claim;
  • The director has not made any other financial contribution in recompense for the misconduct;
  • The Liquidator, Administrator or the prosecuting authorities in a criminal referral have not indicated to the Secretary of State that they are bringing or contemplating bringing action against the director;
  • The Liquidator or Administrator have identified that the director has financial means. However, in which case the director should be mindful that any separate cause of action could be assigned by the Liquidator or Administrator to a purchaser of insolvency claims to be pursued; and / or
  • Creditors have not taken action themselves.

COMMENT:

Therefore, with the new compensation regime it is the case that a director of a company is now further exposed to further risk of personal liability.

The well-advised director should be mindful of whether or not they are exposed to a claim for compensation and should seek and obtain legal advice as soon as they are written to by the IS making enquiries about a company. This is important because the solicitor can advise you on where your financial exposure may lie and how to mitigate that.

WHAT TO DO NOW:

My name is Richard Cole. I am a Solicitor who formerly worked at the IS carrying out director disqualification investigations. I am now the Directors Friend. Why not contact me to discuss on: +44(0) 1992 558411. The earlier that you speak with me the more that I can help.

Why not sign up for my seminar - http://www.breezeandwyles.co.uk/the-directors-friend-helping-you-on-the-road-ahead/? Only a month to sign up now!

Until the next time...

THE DIRECTOR’S FRIEND


BreezePlus

Broker Engagement Programme

In an effort to support brokers more, Breezeplus+ Legal Solutions has today launched its Broker Engagement Programme.  

The Programme is open to any broker who has more than five current remortgages being processed by us. This program will allow those brokers to obtain bulk updates on their cases quickly and efficiently. It will also relieve our Borrower focused telephone number to enable Borrowers to get through our system.  

In order to enable this to work the brokers on the programme will need to be able to centralise all of the information gathering through a single point of contact within their organisation to allow faster turnarounds on progress updates. 

If you are interested in joining the programme please contact us at Brendan.obrien@breezeplus.co.uk, paul.williams@breezeplus.co.uk or peter.jones@breezeplus.co.uk. We can then contact you to discuss the programme and also identify and allocate you a single point of contact.

 


INCREASING COMPANY INSOLVENCIES

This is the next in the series of my blogs for the Director's Friend.

THE LATEST STASTICS:  

On 28 April 2017, the latest quarterly insolvency statistics were released by the Insolvency Service (‘IS’). By comparison with the first quarter of 2016 company insolvencies have increased across the board.

  • Total company insolvencies have increased by 5.3%;
  • Creditors Voluntary Liquidations have increased by 5.4%; and
  • Compulsory Liquidations have increased by 2.8%.

This would appear to be a reversal of the general decline in corporate insolvencies since the first quarter of 2009. However, according to the IS a recent spike appears to be down to 1,796 personal service companies (PSC’s) entering creditors voluntary liquidation in the final quarter of 2016 following changes to claimable expenses rules.

In addition, individual insolvencies are also in the increase primarily driven by an increase in individual voluntary arrangements.

COMMENT:

 It would appear that from the position of the well-advised director that the number of director disqualification investigations may also increase going forward bearing in mind the increasing pool from which these investigations can commence.

In addition, prior to responding to director disqualification investigations the well-advised director would do best to consider whether there are any other investigations ongoing and whether or not there is a risk of the IS also seeking compensation on behalf of creditors as well.

My name is Richard Cole. I am a Solicitor who formerly worked at the Insolvency Service carrying out director disqualification investigations. I am now the Director's Friend. Why not contact me to discuss on: +44(0) 1992 558411.

Until the next time...

THE DIRECTOR'S FRIEND


Domestic Abuse Convention to be followed in UK.

On the 27th April 2017 The Preventing and Combating Violence Against Women and Domestic Violence (Ratification of Convention) Act 2017 received royal assent.

The purpose of this act was to ratify (make official) the UK’s agreement to comply with the Council of Europe Convention on Preventing and Combating Violence Against Women and Domestic Violence which is also known as the Istanbul Convention.  

Violence in any form is unacceptable and although domestic abuse is perpetrated against men and women, statistics show that the majority of victims are female. The convention is based upon the understanding that Domestic Abuse is committed by men against women because they are women and as a way to sustain male power and control. The convention places an obligation upon the state to prevent violence, protect victims and prosecute the perpetrators. It is stated that there can be no real equality between men and women if women experience gender based violence and that states that turn a blind eye and do not actively take steps to tackle these issues are complicit.

Countries that ratify the convention are obliged to raise awareness and educate and encourage people to challenge gender stereotypes, harmful traditional practices and misogynistic attitudes, establish shelters, hotlines, medical services, counselling, legal aid, criminalise and actively prosecute all forms of domestic abuse whilst ensuring that culture, tradition or so called honour are not regarded as a defence. The convention also requires countries to give an annual progress report until they are able to say that they are compliant with the convention.

For current victims of domestic abuse there is support available and it is important to get quick, reliable and easy to understand advice to know what your options are. Our family department is able to offer advice in relation to the full range of family law issues including domestic abuse, finances, divorce and children. Karen Johnson, one of the directors at Breeze and Wyles Solicitors Ltd is a Resolution Accredited domestic abuse specialist and Breeze and Wyles Solicitors Ltd are also members of the East Herts and Broxbourne Domestic Abuse Forum.

For more information and support contact us on 01992 558411 or complete our online enquiry form.