How are debts owed to family members dealt with in divorce proceedings?
The first question for the court to determine is whether the debts are legitimate, and this is a...
The recent disqualification of the so-called "Phoenix Four" has highlighted one of the consequences of misconduct by company directors.
The four businessmen purchased MG Rover in 2000 - the car manufacturer subsequently went into administration in 2005 resulting in more than 6,000 redundancies. An independent report on the collapse found evidence of excessive pay awards and pensions to management and the diversion of funds into offshore accounts. The Phoenix Four have now been disqualified for periods of between three and six years.
Interestingly, the disqualifications are "voluntary". Following a company failure the Official Receiver or IP must send to the Secretary of State a report on the conduct of the directors. The Secretary of State must then decide whether it would be in the public interest to seek a disqualification order. The directors in question may however give an undertaking to the Secretary of State which has the same effect as a disqualification order and puts a stop to any legal proceedings.
In this case, the fact that the former directors have voluntarily undertaken not to act as directors for the relevant periods has enabled them to issue a statement through their spokesman to the effect that they believed they had done nothing to justify disqualification and that their intention was to save the taxpayer the cost of protracted proceedings.