Director disqualified for 5 years after mishandling company funds

A businessman has been disqualified from being a director for five years after making payments to himself to the detriment of creditors while his company was insolvent.

Mark Hulbert was the director of construction company Hulbert Homes Limited (Hulbert). He was disqualified following an investigation by the investigations team of the Insolvency Service. 

The company went into administration in April 2012 owing more than a million pounds to its unsecured creditors. It had no unsecured assets available. 

Prior to 23 June 2011, two trade creditors had obtained County Court Judgements against the company and on 30 June 2011, the company was advised by its accountants that it was insolvent. 

Despite the state of the company’s finances, investigators discovered that between 23 June 2011 and April 2012, Mr Hulbert made several payments totalling £42,664 to his own benefit, including £20,000 for private school fees, £17,734 to an auction house and £4,930 to a former girlfriend.  During the same period, nine judgement creditors, who were owed a total of £74,364, were left unpaid. 

Mark Bruce, a Chief Investigator at The Insolvency Service said: “The director in Hulbert failed to act in the best interests of the company and its creditors. The Insolvency Service will always look to remove from the business community those directors who act below the standards that should be expected of them given the circumstances of their company’s trading.”

A disqualification order has the effect that without specific permission of a court, a person with a disqualification cannot:

  • act as a director of a company
  • take part, directly or indirectly, in the promotion, formation or management of a company or limited liability partnership
  • be a receiver of a company’s property.

Please contact us if you would like more information about the issues raised in this article or any aspect of company law.

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