Advertising whilst in liquidation

[Cpt Morgan]

Hi,

Can anyone advise if it is legal to still advertise a business which is in liquidation via social media (twitter, Instagram etc), linking content to a new business?

The company in question, was used as a sub contractor.

For clarity lets say Company B was the sub contractor (now in liquidation), being subcontracted by Company A

Company B's name is only similar to Company A's in that the first word of the name is the same, so looking at the exceptions rules in the IS Act S216/217, they don't seem to apply, although I am sure some would try to argue differently as they generally referred to themselves as "X", being the first word in the companies title, but have never officially identified as "trading as" X in any documentation etc, just word of mouth.

None of the other exceptions apply, as nothing has been registered in the Gazette, and the liquidator has confirmed they have not been approached.

Company B still has open media pages with links to Company A and indeed other Companies they don't own, and the company still use vehicles displaying Company B's name on it.

Any support / advise gratefully received as I am currently in litigation and believe for this reason and many others, that the directors are potentially personally liable

Thanks.

[atticus]

This is not clear. You give the impression that the company that is advertising is the one that is not in liquidation. Is that correct?

If it is, then ss216/217 Insolvency Act 1986 may be engaged. We have discussed this in the past. Whether and how this helps you is also not clear.

[Cpt Morgan]

This is not clear. You give the impression that the company that is advertising is the one that is not in liquidation. Is that correct?

If it is, then ss216/217 Insolvency Act 1986 may be engaged. We have discussed this in the past. Whether and how this helps you is also not clear.

Company A and B are owned by the same directors, and they are still using the same company names, both A and B in associated advertising, including media websites and on vehicles. So they owned B (now in liquidation), and still have "B's" name on the side of the company vehicles. The FB website they use for Company A, still also points to Company B, and uses details within their "about" column on FB, stating "Company B has existed for 25 years etc, yet the actual FB webpage implies they are in fact Company C, which isn't owned by them at all!!

Establishing this is very helpful, as it proves that the directors are deliberately misleading their clients, and are breaching their director responsibilities as well as Consumer Protection law. They have advised that my contract was with Company A, yet all paper work and signed documents imply my business was with Company B. It is also clear that documents submitted to CH show that they knew Company B was in financial difficulties well before they started work on my property, but continued to sub contract work from A to B, which continued after they entered into liquidation.

When approached for their business insurance they provided a ref stating the policy number for Company B, but not A, yet in documents submitted to court they have stated my contract (verbal) was with Company A.

The directors have now failed to file a completed defence within the time frames set, have claimed they also emailed this but never sought my permission for email service (PD 6A) and as such I have not yet had a full copy of their defence (there were a few pages pushed through the letter box apparently, but as I am away, this has not been seen by me to date, and or served on me personally, many months after the date set by a judge.

There is a hearing to now discuss financial disclosure of payments made and whether these have been submitted for A or B, as I have made it clear this makes a huge amount of difference. If the directors have not submitted the correct payments for my build through their accountants, then they can be held personally liable for any associated debt. This up and coming hearing is also set to discuss the failure (or not - for a judge to decide) of the defendants to serve a defence in time, which they haven't. along with issues as you state under S216/S217 of the IS, this once again can render the directors personally liable, which along with many other failures to comply with regulations i.e Companies Act and or CCR, as well as the directors now being investigated by the liquidator and IS for S216/S217 there are a host of issues that leave the directors liable.

[Cpt Morgan]

Company A and B are owned by the same directors, and they are still using the same company names, both A and B in associated advertising, including media websites and on vehicles. So they owned B (now in liquidation), and still have "B's" name on the side of the company vehicles. The FB website they use for Company A, still also points to Company B, and uses details within their "about" column on FB, stating "Company B has existed for 25 years etc, yet the actual FB webpage implies they are in fact Company C, which isn't owned by them at all!!

Establishing this is very helpful, as it proves that the directors are deliberately misleading their clients, and are breaching their director responsibilities as well as Consumer Protection law. They have advised that my contract was with Company A, yet all paper work and signed documents imply my business was with Company B. It is also clear that documents submitted to CH show that they knew Company B was in financial difficulties well before they started work on my property, but continued to sub contract work from A to B, which continued after they entered into liquidation.

When approached for their business insurance they provided a ref stating the policy number for Company B, but not A, yet in documents submitted to court they have stated my contract (verbal) was with Company A.

The directors have now failed to file a completed defence within the time frames set, have claimed they also emailed this but never sought my permission for email service (PD 6A) and as such I have not yet had a full copy of their defence (there were a few pages pushed through the letter box apparently, but as I am away, this has not been seen by me to date, and or served on me personally, many months after the date set by a judge.

There is a hearing to now discuss financial disclosure of payments made and whether these have been submitted for A or B, as I have made it clear this makes a huge amount of difference. If the directors have not submitted the correct payments for my build through their accountants, then they can be held personally liable for any associated debt. This up and coming hearing is also set to discuss the failure (or not - for a judge to decide) of the defendants to serve a defence in time, which they haven't. along with issues as you state under S216/S217 of the IS, this once again can render the directors personally liable, which along with many other failures to comply with regulations i.e Companies Act and or CCR, as well as the directors now being investigated by the liquidator and IS for S216/S217 there are a host of issues that leave the directors liable.

Plus it is my understanding that if Company B was still trading after liquidation, which can be proved by financial submissions (hence my request for disclosure), then this would be wrongful or fraudulent trading, however if payments I made show that indeed my contract was with A, then their submission to the courts claiming they subcontracted work throughout my build to B would be a lie (contempt of court) as they must have made payments from A to B to support their position, again accounts would show this, hence my request for disclosure.

It should also be noted that in the back ground they are not supporting the liquidator and have been accused by the liquidator of e.g. under value transactions and nil value building transfers, yet have not provided the liquidator with a response despite repeatedly being chased, and Company B owes over half a million in unpaid VAT/PAYE, which all goes to prove they are a dubious company and undermines their position.

[Cpt Morgan]

Can anyone advise in association with the above thread

Can the directors of a company now in liquidation reply to and sign legal documents regarding actions taken out against that out against that company. My question is due to the fact they no longer have control I guess the answer is no, and if it is no should they have provided the liquidators name and address details for legal document service ?

[atticus]

Is it a compulsory liquidation?

[Cpt Morgan]

No it’s voluntary

[atticus]

In that case, s103 Insolvency Act 1986 applies. Inform the liquidator.

[Cpt Morgan]

The liquidator (acting for company A) is aware however they believe ( incorrectly ) that due to invalid invoices which have ‘materialised’ after the event that were never sent to me personally, that the contract was with a different company

I have paper work and voicemails confirming my contract was with A not B, and indeed voicemail confirmation that cash payments were taken as well that have not been supported by any invoices.

My concern is that the directors of both A and B ( same people ) have provided a defence to court and signed the defence with a statement of truth for both companies yet my claim was brought about after liquidation so I don’t think they were authorised (a) to sign when in liquidation (b) nothing re a defence has been provided for the company in liquidation despite the liquidator being aware of my claim.

Surely if the liquidator is aware of the claim (which I know they are, they should have made and signed a defence or else by failing to do so effectively ( in default ) admit the charge ?

[Huxie]

DINSHAM is a spammer and has been reported (again).

[Cpt Morgan]

Further to these points, it has become clear the Company A sub contracted work to a sister company, company B, however it has also become clear that whilst they were registered for CIS, none of the CIS payments have been made and no invoices have been provided to the liquidator of company B concerning any of these apparent sub contracted tasks.

Surely base on these points alone the IS should disqualify these directors, however it is also clear from the liquidators report that company B also sold vehicles to company A prior to liquidating (UVT) under value, plus transferred contracts for nil value, and that company B also owes hundreds of thousands in unpaid VAT and PAYE, plus was taking cash payments for work prior to entering voluntary liquidation therefore implying (to me at least) wrongful or indeed fraudulent trading.

My understanding is that company directors have a fiduciary responsibility to their creditors as soon as they realise they are in financial difficulties and it is also clear that the directors of company B knew they were in trouble well before they entered Voluntary Liquidation as debits to creditors were significantly increasing in the months building up to liquidation.

The IS and Liquidators seem to know all of this, yet to date nothing has been reported to advise these directors have been disqualified, let alone anything else, and I am stunned that they are continuing to trade under Company A, especially given the obviously link with none payment of CIS tax when sub contracting to company B.

My own expectations would be director disqualifications and prosecution for at least wrongful trading, but more importantly fraudulent trading given the number of issues identified.

Can anyone advise.

[atticus]

The Insolvency Service generally pursues disqualification action when satisfied it has a strong chance of winning. Don't forget that it is a government agency, (under)funded by the government with all that entails. When I worked on these cases (I stopped a few years ago) the Insolvency Service had 2 years from date of liquidation to commence disqualification proceedings. I have a feeling that period may have been extended.

Liquidators will take action if (a) satisfied they have a strong case, (b) satisfied the intended defendants are worth suing, and (c) if they have the funds to do so. The third item is often a problem..Wrongful trading claims can be tricky. You describe possible claims in respect of transactions at an undervalue.

[Cpt Morgan]

The Insolvency Service generally pursues disqualification action when satisfied it has a strong chance of winning. Don't forget that it is a government agency, (under)funded by the government with all that entails.

Liquidators will take action if (a) satisfied they have a strong case, (b) satisfied the intended defendants are worth suing, and (c) if they have the funds to do so. The third item is often a problem..

Many thanks for clarifying.

Given the points I have identified, and the liquidators reports showing not only under value transactions, a lack of directors support towards the liquidator, nil value contract transfer (as yet un explained), large HMRC tax debts for unpaid VAT/PAYE and CIS, plus proof of cash payments taken whilst insolvent, would you agree there is easily enough evidence to support anyone of a number of items that are each worthy of disqualification (and more) ?

[atticus]

If the evidence backs up what you say, then it would appear to justify disqualification action.

I have now checked - the time limit for bringing disqualification action is now 3 years from date of liquidation.

[Cpt Morgan]

If the evidence backs up what you say, then it would appear to justify disqualification action.

I have now checked - the time limit for bringing disqualification action is now 3 years from date of liquidation.

Again thanks for your reply

Yes I checked as well, and they have 3 years to bring about disqualification, so I guess my only hope is that they are formulating a plan of attack, but I feel given the overwhelming evidence they already have, it seems odd that they haven't taken action already. I suppose the only option is to wait?

If they don't act, is there anyway or highlighting any short falls which may or may not happen within the IS or indeed by the liquidator so that their own actions are reviewed.

My concern is that there appears to be a pattern of behaviour across other companies these directors have owned, yet so far they seem to be "getting away with it", and the amount of Rogue Traders in the construction industry in the UK/Scotland and Ireland seems to be growing enormously, and much like the recent post office scandal (albeit not against one organisation), the damage caused to peoples lives and finances is devastating. It's not until these issues hit the media, that the government seems too suddenly react and public support grows. On the 22nd January there is a related programme called Rogue Traders which is highlighting the plight faced by so many burt one area I do know is not being covered is the associated failures of Trading Standards, The Insolvency Services etc, which only adds fuel to the fire, and allows Rogue Builders to continue to destroy lives.

Fingers crossed the IS take the necessary action in this case.