10 Year Ban For Director


17 November, 2014

A Manchester based director has been disqualified for 10 years after the Court found that it was in the public interest to wind up his company.

In February 2012 the Court made a winding up order in relation to Advanced Media Information Limited ('AMI'). The Court found that the trading of AMI, which involved the sale of franchises to the public for the sale of advertising media in hotels, was against the public interest. In particular the director of AMI, Philip Roy Smith-Lawrence, was found to be using 'unreasonable representations' of potential sales and earnings.

Over two years on, following an investigation by the Insolvency Service, Mr Smith-Lawrence was disqualified from acting as a director for 10 years. The Insolvency Service found that Mr Smith-Lawrence knew or ought to have known that his claims were excessive and projected sales were unachievable.

The investigation found that Mr Smith-Lawrence received remuneration of £180,000 over a 29 month period. The Official Receiver found that Mr Smith-Lawrence should not have received anything as none of the income and sales from AMI were derived from transactions in the public interest.

Under the Insolvency Act 1986 the grounds which can be used by the Court to wind up a company include the following:

  • It cannot pay its debts.
  • That the company has passed a special resolution that it be wound up by the Court.
  • That the Court is of the opinion that it is just and equitable for the company to be wound up.

In this case the Court held the finding, that it would be in the public interest for the company to be wound up, was sufficient to satisfy the 'just and equitable' ground.

Other circumstances which have been found to be sufficient to satisfy the 'just and equitable' ground include:

  1. Formation of a company for fraudulent or illegal purposes.
  2. Oppression of the minority shareholders by a majority. The acts of oppression must be serious and sustained, not isolated acts.
  3. Grounds which would justify the dissolution of a partnership or where a deadlock has arisen in the management of a company.
  4. Where a company was formed for a specific purpose, and that purpose has either been attained and completed, or can no longer be attained.

At Forbes we deal with all aspects of corporate and personal insolvency, including the winding up of companies. We deal with both presenting winding up petitions and defending them. If you would like any advice in relation to this or any other aspect of corporate or personal insolvency please contact Lucie Cocker on 01254 222342 or by email Lucie Cocker


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