Director banned for paying herself while failing to pay creditorsJune 30th 2021
A broker who traded while insolvent and took money from her company for herself while failing to pay creditors £140,000 has been disqualified for seven years.
Mark Aspin Director & Head of Dispute Resolution reports.
Kathleen Shepherd, aged 58, from Southampton, was the sole director of Shepherd Site Services Limited, a company which acted as a broker to provide waste management services to the construction industry.
The company went into administration on 20 November 2019 and an investigation was started by the Insolvency Service.
It was found that the company was insolvent from at least April 2019 and at that point owed at least £50,000 to 10 suppliers.
Kathleen Shepherd assured suppliers that invoices would be paid, causing some to delay enforcement action, and the company continued to trade and incur further debts.
Between April 2019 and November 2019, Shepherd Site Services Limited failed to pay an additional £85,600 owed to 17 suppliers.
Despite this, the investigation found that Shepherd during this period directly or indirectly received the benefit of £76,553 and made payments of more than £20,000 to a connected party.
At administration, Shepherd Site Services Limited was subject to 7 County Court Judgement (CCJ) applications and suppliers were owed more than £140,000.
She has been banned from acting as a director for seven years, meaning she cannot, directly or indirectly, become involved, without the permission of the court, in the promotion, formation or management of a company. Her ban started on 9 June 2021.
Neil North, chief investigator at the Insolvency Service, said: “This ban should serve as a warning to other directors tempted to act in a similar way; you have a duty to your creditors and if you neglect this duty, we could investigate and you may lose the privilege of limited liability trading.”
If you would like more information about the issues raised in this article please contact Mark on 01228 516666 or click here to send him an email.