Director banned after transferred £1 million from insolvent company

Blog Insolvency

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A man has been banned from acting as a company director after attempting to move more than £1 million out of his insolvent business.

The Insolvency Service, which published the report, says the director of the construction company “put his own personal financial interests above those of creditors”.

The company ran into financial difficulties after more than 30 years of trading, and eventually entered liquidation on 19 February 2016.

But administrators appointed to wind down the business reported to the Insolvency Service that the directors had not fully co-operated with them and failed to explain why the company had moved more than £1 million two weeks before they were called in.

It was found that the company had owed around £300,000 to a trade creditor and had moved £1,044,794 to avoid paying its debts.

The money was transferred to three other businesses which were all operated by the construction director.

In February 2018, he admitted transferring the capital “to the detriment of the company’s general body of creditors’ and was banned from acting as a director for eight years.

Robert Clarke, Head of Insolvent Investigations North at the Insolvency Service, said: “Following extensive enquiries, we discovered not only had Winksill transferred more than a million pounds out of the company to avoid paying his creditors what they were owed, but the money was moved to other companies which we found that he was also running.

“Directors who put their own personal financial interests above those of creditors damage confidence in doing business and are corrosive to the health of the local economy. This ban should serve as a warning to other directors tempted to help themselves first, you have a duty to your creditors and if you neglect this duty you could be investigated by the Insolvency Service and lose the privilege of limited liability trading.”

If you need help paying your debts, it is important you seek help at the earliest possible moment. Gibson Hewitt acts fast to stay on top of debt and give company directors a chance to turn their company around or wind down their company safely and securely.