S216/S217 Insolvency

[Cpt Morgan]

Hello,

i was wondering if anyone could shed any light on the details surrounding these sections of the Insolvency Act

It would appear on the surface that a company cannot re-use an old company name after liquidation, but there are 3 exceptions.

The exception I am concerned about is;

1. If the new company has been trading for at least 12 months prior to the liquidation of the old company. Note it must have been actively trading throughout that period, it is no good if it was dormant for part;

Taking this literally, if the owner of the company now in liquidation, had simply set up a different company name more than 12 months prior, and continued to run this company along side the now insolvent one, they can therefore in theory, still use the old companies name despite it being in liquidation, effectively making S216 redundant/useless if the company director knows this. All they need to keep doing is setting up a string of companies, and as long as they have existed for more than 12 months prior, they can continually run up company debts, refer to themselves as the name they are always "known" by,, fold the company leaving, in some cases huge debts, and then continue trading under the name of the company that has gone under. Whilst Phoneixism exists, this "exception", seems to allow this practise to easily be avoided with the tiniest amount of forethought.

Am I right?

[atticus]

Yes, that is correct. But it requires a degree of preparation that is not common in s216 cases.

An example of this is in the 2005 Court of Appeal case ESS v Sully https://www.bailii.org/ew/cases/EWCA/Civ/2005/554.html

[Cpt Morgan]

Yes, that is correct. But it requires a degree of preparation that is not common in s216 cases.

An example of this is in the 2005 Court of Appeal case ESS v Sully https://www.bailii.org/ew/cases/EWCA/Civ/2005/554.html

Hi, thank you for this, I have read through the numerous points, and not being legally trained find the whole point of the 3 exception inundated with ifs, buts and maybe's depending on "interpretation", which makes a mockery of the idea of stopping companies from simply folding and re-emerging. Clearly if they are aware of this exception, and "prepared" to act in this way, they get away with it.

How ridiculous is the law?

To expand a little further if I may, and I won't use the real companies name I am referring to here for obvious reasons;

The company where I have an issue, often referred to themselves as one of the following during their existence as BeeBop Projects Ltd, before falling into liquidation.

(a) BeeBop
(b) BeeBop Projects
(c) BeeBop Projects Ltd - in liquidation
(d) BeeBop Construction Ltd (formed more than 12 months before BeeBop Projects Ltd went into liquidation)
(e) BeeBop Group Ltd (Not even owned by them)
(f) BeeBop Developments Ltd (formed more than 12 months before BeeBop Projects Ltd went into liquidation)

So no matter who they were identifying with on any given day, they used any or all of these names!

When my implied contract started, all vehicle advertising and paper work and discussions including voice mails, referred to either BeeBop, or BeeBop Projects, but nothing more.

When the company was asked for invoices and receipts it only provided invoices for bank transfers, this time using the name BeeBop Construction Ltd. When I looked at the bank account name being paid, it was simply only BeeBop Construct, again nothing more.

The builders was appalling and as a result I had needed to take court action, but it is very confusing to establish exactly who my contract was with, as all paper work, and even email addresses point to either BeeBop, BeeBop Projects, or BeeBop Projects Ltd (now in liquidation), with now only very recently provided invoices introducing the name BeeBop Construction Ltd, and subsequent email addresses changing to either BeeBopGroupLtd, or BeeBopConstructionLtd

Initially I thought I was dealing with a soul trader (BeeBop/BeeBop Projects) as all paper work, including payment application schedules referred to those names, with no inference that they were even "Ltd" at this point in time. Emails received though did state "BeeBop Projects Ltd", but then I noticed half way through the building work that the email addresses changed (in some but not all cases), to BeeBop Construction Ltd, and or BeeBopGroupLtd.

Now I have taken court action, they have stated my contract was with BeeBop Construction Ltd!!

It is worth noting, that their current advertising (facebook - it has changed recently but not during the time I was in business with them) refers to themselves initially as BeeBop Construction Ltd, but then within the content, and "about info" (facebook) they call themselves BeeBop Group Ltd (owned by someone else completely) and also to BeeBop Projects Ltd (in liquidation) with no Gazette entries and or permission given by the liquidator to continue to use this name.

Sorry if this is long winded, but these are the basics, with other examples of e.b. emails being sent from the director of BeeBop Construction Ltd, to suppliers, yet signed off as the director of BeeBop Projects Ltd, after they entered liquidation. The list of anomalies like this are huge, with office staff sending emails still also implying they were BeeBop Projects Ltd, or indeed BeeBop Group Ltd, and I could provide many many other examples.

The IS are now looking into this under S216/S217, with help from the liquidator, recently confirmed by the submissions to Companies House, with the sums of money owed by BeeBop Projects Ltd, and associated companies they have previously folded running into many 100's of thousands if not millions of pounds when you review their history, but I would appreciate any other points/observations you may have as well, as I can see you are well read in this area the law.

Is it clear "mischief" is at hand, and would this leave them exposed under S216/S217?

Many thanks.

[atticus]

Mischief is not a word used in this legislation.

I am interested that there is no mention of Be Bop Deluxe, although I can see why the Insolvency Service is investigating: these companies do appear to be passing like Ships in the Night.

[Cpt Morgan]

Bee Boo Delux ?

Given the IS are investigating what do you think they are looking at under S216?

[atticus]

given that ss 216 and 217 Insolvency Act 1986 concern use of company names following liquidation, I expect that is what the Insolvency Service is investigating.

[Cpt Morgan]

given that ss 216 and 217 Insolvency Act 1986 concern use of company names following liquidation, I expect that is what the Insolvency Service is investigating.

That is obvious, but given what you said re the allowances under the exceptions rules, why would they investigate given the info I have provided. Does anything look "wrong" on this basis, aside from a comment like 'Ships passing in the Night", as I can't see this under any exceptions rules!

[atticus]

Investigation is clearly warranted.

[and you do not appear to have understood my references to Be Bop Deluxe and Ships in the Night. My little joke, sorry.]

[Cpt Morgan]

Investigation is clearly warranted.

[and you do not appear to have understood my references to Be Bop Deluxe and Ships in the Night. My little joke, sorry.]

Why is investigation "clearly warranted", given exception rule 3 seems to have been complied with, on one hand it seems you are saying that they company seems to have complied with the rules, and then suggest that the IS are right to investigate, but without suggestion on what basis.

[atticus]

I do not have the full facts, dates etc. If you do, you are not expressing them clearly. I can see why the Insolvency Service is investigating. Perhaps, like Mr Raab, you should await the outcome.

[Cpt Morgan]

I do not have the full facts, dates etc. If you do, you are not expressing them clearly. I can see why the Insolvency Service is investigating. Perhaps, like Mr Raab, you should await the outcome.

What difference would a date make in this case, perhaps if your replies were clearer I could provide what is required necessary, so please ask away re dates and I will happily provide them.

What dates would you like?

PS Mr Raab has his outcome which was duly shared, however the IS don't share their findings as I am sure you are aware.

[atticus]

If you think dates make no difference then what do you think is the relevance of the exception stated in post no 1?

I will not be taking further part in this thread.

[Cpt Morgan]

If you think dates make no difference then what do you think is the relevance of the exception stated in post no 1?

I will not be taking further part in this thread.

Touchy touchy, for someone with your back ground your replies are very incomplete and vague, hence why I raise questions. The associated company had been trading for more than 12 months, but as the IS were aware of this prior to starting their investigations, my question STILL remains.