Graham M. Bradbury, the company director of Guardian Self Storage Ltd, has been banned from working within a director’s capacity (wrongful trading) for any business for five years, after an investigation into his conduct by the Insolvency Service as company head when it was struggling with cash-flow problems.
How was the director engaging in Wrongful Trading?
Bradbury conceded that he was guilty of selling the contents of 29 self-storage units to an external organisation for £29,000 in cash, just one month prior to his business entering into a creditors’ voluntary liquidation, the Insolvency Service identified. They elaborated that their sources during their investigation into Mr Bradbury’s conduct had revealed that bailiffs working on behalf of the company buildings landlord to recover outstanding debt, had seized assets on the business’ premises.
According to the Insolvency Service brief, Bradbury outlined to investigators that the new found money was being utilised to pay the wages of subcontract labourers, subsidise the costs of redundancy packages for the business’ employees; pay the accountant, prospective lawyers and liquidators and pay back one member of staff who had loaned the business money. However, it was ruled that the itinerary which was purchased by the external party to raise the money did not legally belong to the limited company, and the re-allocation of the money acquired through their sale violated the conditions of the liquidation because the cash was not evenly spread amongst all Guardians creditors.
Guilt of Directors misconduct
Sue MacLeod, the Chief investigator of the case, argued that the punishment handed out to Mr Bradbury was a clear indicator that directors guilty of misconduct would be punished appropriately, particularly in cases of wrongful trading such as these when a company head has evidently shown preferential treatment to one creditor over another. “The law is very clear; all creditors of an insolvent company should be treated fairly so that each obtains a share of any payout, rather than creditors being cherry-picked,” Ms MacLeod said.
“Mr Bradbury had already been in contact with an insolvency practitioner before he sold company assets, yet used that revenue in such a way that some creditors received nothing at all while others were paid in full. The consequence is that he is now disqualified and cannot continue in business, other than at his own risk.”
Banned from working in any directors Capacity
Bradbury will now be banned from working in any director capacity, or managing; or controlling a limited company, until May 2019. His business first passed into voluntary liquidation back on October 26th, 2012, after accumulating creditor debts totalling £178,626. Of this debt, sources suggest around £65,000 was owed to the business residences landlord whilst £27,121 was owed to Her Majesty’s Revenue Customs (HMRC) and a further £14,646 to an unspecified bank. When the liquidation initially began, there were a plethora of news publications released which highlighted that a multitude of tenants had been ‘cheated’ by the company and hadn’t been able to attain access to their possessions and items stored in the facility. One former client, Jeanette Weir, has argued that the company cost her almost £30,000 through their misconduct by losing some of her ‘irreplaceable belongings”; including family heirlooms, presents and other personalised pieces of miscellany. “I think a lot more should be done. A lot of people have been affected by it,” Weir told the source. “People have lost everything but received no compensation. The way everything was handled was disgraceful. [Bradbury] should be held personally and financially responsible.”
Despite the long-term ban imposed on Bradbury for his misconduct, no criminal charges have been levelled against him, despite this potential course of action being a possibility in cases such as his.