The directors of George Hunter (Demolition) have been banned for a total of 17 years.
This follows an investigation from the Insolvency Service, which found they had allowed the company to incur liabilities while subject to a winding-up petition.
Who are George Hunter (Demolition)?
The Glasgow-based demolition company was founded in 1958, and is reckoned to be one of the oldest companies of this type in the UK.
At its peak, it employed 50 staff and turned over £7m a year. For a time it was a very successful business, and won the World Demolition Contract of the Year award (2013) for taking the former Bank of Scotland building in Glasgow's Queen Street.
However, the company went into liquidation on 20 April 2015, owing £1,755,782 to its creditors.
Accountancy firm French Duncan was appointed as insolvency practitioner for the firm and stated a "difficult trading period" as the cause of the company's decline.
Who are the directors, and why have they been disqualified?
- George Beattie Snr and Michelle Beattie were appointed as directors of the company on 2 April 2003. George Beattie Jnr became a director on 1 June 2012.
- George Beattie began his seven-year disqualification on 12 April 2017, while George Jnr and Michelle began their disqualifications on 31 May 2017. George Jnr received a seven-year ban, while Michelle was given three-years and six-months.
- During these periods, none of the three can act as a company director; take part in promotion, formation or management of a limited company; or be a receiver of a company's property.
The disqualifications came as a result of an investigation by the Insolvency Service. This found that the directors had continued to trade for their own benefit and incur further liabilities, despite a winding-up petition being issued by HMRC and presented to Glasgow Sheriff Court in January 2015.
A winding-up petition is the most serious action that can be taken against a company. Through this official legal procedure, creditors petition for the company to be liquidated so they can recover their money. It also ensures that the insolvent company ceases trading immediately.
Though the three directors were aware of the petition, they made net payments of at least £117,331 to connected companies between the petition's submission and the company's liquidation. This was in addition to the minimum of £37,979 that went to, or to the benefit of, the company directors.
The investigation also found that the directors managed to reduce the amount they owed the company by at least £457,395 after the winding-up petition had been served.
These actions saw the amount of liabilities owed by the company to creditors increase by £359,097. However, the company has insufficient assets to cover this amount, so it's likely that many of the creditors will not be paid.
Rob Clarke, head of Insolvency Service division, Insolvent Investigations North, said: “This was a cynical attempt by the directors, in the clear knowledge that their company was insolvent, to extract money that should have been paid to other creditors.
“The Insolvency Service will take robust action against this sort of misconduct which is a clear abuse of limited liability.”
If you are concerned about wind-up petitions or insolvency, get in touch with Company Rescue today.