Business

Insolvency and Criminal Investigations

BUSINESS OBJECTIVES ACHIEVED

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When a company runs into difficulties, those involved in the management of that business can face allegations of criminality over the way the business was run prior to its insolvency. The team at Forbes are experienced in the representation of both companies and individuals at this extremely stressful time.

If you are facing the possibility of insolvency and are concerned about the prospect of a criminal investigation it is essential to seek expert advice immediately.

If instructed early we will always endeavor to avoid a report to the Insolvency Service investigation team. This is normally achieved by negotiating and co-operating wherever possible. Such cases often require a multi-disciplinary legal team that can assist you to navigate issues relating to insolvency, company, employment, and criminal law. Forbes Solicitors specialist insolvency defence team can offer you this bespoke service at a very reasonable cost.

Insolvency Investigations

Section 432(2) of the Companies Act 1985 gives the Secretary of State the power to appoint an inspector(s) to investigate the affairs of a company if it appears that the company is being conducted:

  • with the intent to defraud creditors or the creditors of any other person
  • for a fraudulent or unlawful purpose
  • in a manner which is unfairly prejudicial to some part of its members or where any actual or proposed act or omission of the company is or would be so prejudicial
  • where persons concerned with the company's formation or management have been guilty of fraud, misfeasance, or other misconduct towards members
  • where company members have not been given all the information which they might reasonably expect.

Warrants

Section 448 of the Act provides a search warrant can be obtained if there are reasonable grounds for believing:

  • there are on any premises, documents where production has been required but which have not been produced
  • an offence has been committed for which the penalty on conviction on indictment is imprisonment for a term of no less than two years and there is documentation on any premises relating to whether the offence has been committed
  • that if production was so required, the documents would not be produced but would be removed from the premises, hidden, tampered with or destroyed.

Disclosure

Section 447 of the Act provides the Secretary of State may direct, or the investigator authorised by the Secretary of State may give directions to a company/or any other person to produce documentation or information required.

This power is not restricted for use against the company directors but can also be directed towards any person connected with the company

Interviews

Company Investigators may also seek to obtain information by interviewing company directors, senior management, employees and others connected to the company.

Possible outcomes

An investigation by the Insolvency Service can be devastating to a business both in terms of its reputation and also the potential consequences which include:

  • Issue of a Warning Notice
  • Winding up of the company
  • Director Disqualification Proceedings
  • Criminal proceedings

Common criminal proceedings include offences of fraudulent trading, failure to preserve company accounting records, and failure to disclose property to the Official Receiver.

How can we help?

  • Our bespoke multi-disciplinary team will provide initial advice after the Insolvency Service has confirmed it will be launching an investigation or prosecution.
  • We will communicate with the Insolvency Service on yours or the company's behalf. We will negotiate so as to achieve the best possible outcome.
  • Advice and representation during any interviews and meetings required by the Insolvency Service or any other agency.
  • Ensuring yours and the company's rights are protected and upheld throughout the process, including when searches of corporate premises are being carried out.
  • Representation of you, the company or any of its officers if the case goes to Court.

If you're facing an insolvency service investigation or prosecution get in touch with our specialised insolvency defence team now on 0800 689 0831 or complete our online contact form.

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Our dedicated Insolvency team

Craig Liversidge

Crime

PinPreston

Call07976268000

Gareth Price

Gareth Price

Partner

Crime

PinBlackburn

Call07976 272000

Michael Chambers

Michael Chambers

Partner and Head of Department

Dispute Resolution

PinCentral Lancashire

Call0333 207 0740

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Contact Us

If you have a general enquiry then please fill in your details and someone will contact you.

Call0800 689 0831

CallRequest a call back

EmailSend us an email

Contacting Us

Monday to Friday: 09:00 to 17:00
Saturday and Sunday: Closed