Defending Director Disqualification Proceedings – Reliance on Accounting Advice

Defending Director Disqualification Proceedings – Reliance on Accounting Advice

Our client was an entrepreneurial Director with a successful chain of businesses in the technology sector.  The Director found himself on the receiving end of Disqualification Proceedings brought by the Secretary of State for (it was alleged) his previous company’s failure to pay its HMRC liabilities and for allegedly paying trade creditors in preference to those HMRC liabilities.

The reality of the Director’s situation was that, whilst recognising that liability for the company’s HMRC liabilities ultimately rested with him, he had genuinely believed that the company’s accountants had paid the HMRC liabilities in question.  Furthermore, in believing that HMRC had been paid, the Director could not have preferred the company’s trade creditors above HMRC.

The Director instructed Howat Avraam Solicitors to engage in a dispute with the Secretary of State as to whether or not the Director had genuinely believed the HMRC liabilities to have been repaid.  This dispute continued to Trial where, following the Director’s oral evidence and cross-examination, the Director was successful in establishing that he had sufficiently discharged his fiduciary obligations as Director.

The allegations against the Director were thrown out and it rightly followed that the Director was awarded his legal costs incurred in successfully defending the unmerited Disqualification Proceedings brought against him by the Secretary of State.

If you find yourself in a similar situation to the above, please contact Matthew Howat, head of our Director Disqualification team, on 020 7884 9700 or by email on to arrange a free consultation.

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