Imprisonment for Company Directors who fail to comply with a Disclosure Order
A High Court decision provides a warning to company directors to comply with disclosure Orders issued under freezing Orders. The Court found a company and two of its directors and officers in contempt of Court for a failure to comply with two Court Orders.
The High Court sentenced the directors to 18 months’ imprisonment each as they were responsible for the company’s failure to comply with the Orders.
Both Orders contained a penal notice warning the company and its directors of the consequences of non-compliance with its terms. The Judge found that the Orders had been properly served on the company and its directors but they had not been complied with in any respect.
Matthew Howat, Commercial & Dispute Partner, comments: “This decision highlights the importance of complying with disclosure Orders under freezing Orders and shows that any breach can be visited upon directors personally and may result in an immediate sentence of imprisonment”.