March 01, 2011
The Insolvency Service has applied to the High Court to disqualify nine people from acting as directors after their Christmas hamper company, Farepak went into insolvency. The collapse of the business left around three thousand customers with losses of, on average, £400 each. Directors’ Disqualification Orders can be granted in the public interest on a number of grounds including persistent default in filing returns, fraud and unfitness to be concerned in the management of a company, after a company has become insolvent. It is vitally important that directors take action to protect their creditors as soon as it becomes likely that their business is going to be unable to meet all of its debts. A failure to do so can not only result in the collapse of the business but also personal proceedings being brought against the directors, including bankruptcy and repossession orders and even imprisonment. Directors who are uncertain of their requirements or who would like advice on how best to avoid insolvency proceedings, should seek the advice of a business lawyer.