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Family of directors banned for putting themselves ahead of creditors
A family of directors have been banned from running a company for a total of 19 years after they were found to have benefited themselves over the interests of their creditors.
Husband and wife, John Joseph Power (65) and Helen Catherine Power (66), were directors of Power Installations Ltd and Power Security Installations Ltd.
They were later joined in the management of the companies by their son, Daniel John Power (42), who was also a director.
Operating from premises in Barton le Clay, Bedfordshire, Power Installations was incorporated in June 1996, and Power Security Installations was incorporated in January 2005.
The two companies supplied and installed electrical and security equipment across the residential, commercial and industrial sectors, principally within London and the Home Counties. But after experiencing trading difficulties, they both entered into liquidation in January 2017.
A liquidator was appointed to wind up the affairs of the companies, before reporting to the Insolvency Service about the conduct of John, Helen and Daniel Power.
Further investigations revealed that overdraft facilities were provided to Power Installations and Power Security Installations on a joint basis.
As security, the bank held joint and personal guarantees, limited to £269,000, provided by John and Helen Power. These were further supported by a legal charge over their jointly owned residential property.
However, in the period between discussing formal insolvency options with the eventual liquidator in October 2016 and the weeks leading up to the companies entering into liquidation in January 2017, the Powers caused the two companies to retain trading receipts of just over £320,000.
Retaining trading receipts reduced the overdraft borrowings which they had guaranteed, and while this personally benefited the Powers, creditors remained unpaid and/or liabilities were permitted to increase.
More than £51,000 due to the tax authorities during the period remained unpaid and other money owed to creditors increased by more than £33,000 to at least £967,000.
On 20 September 2019 the Secretary of State for Business, Energy and Industrial Strategy accepted Disqualification Undertakings provided by John Power, Helen Power and Daniel Power. Husband and wife each received 7-year bans, while Daniel accepted a 5-year disqualification.
Effective from 11 October 2019, the family of directors cannot, without the permission of the court, be involved in the formation, promotion or management of a company, directly or indirectly.
Rob Clarke, Chief Investigator for The Insolvency Service said: “The Power family clearly put their own personal financial interests above those of creditors when the two companies were facing liquidation. Such actions not only damage business confidence but are also corrosive to the health of the local economy.
“These bans should serve as a warning to other directors tempted to help themselves first, that you have a duty to your creditors and if you neglect this duty you could be banned for a significant period of time.”
Please contact us if you would like advice about insolvency and company law.