Halifax gas fitters banned from operating businesses after abusing insolvency regime

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The two gas fitters appeared at Bradford Crown Court for sentencing after pleading guilty to breaches of the Insolvency Act 1986.

Colin Richard Marsh, 52, received an eight-month sentence, a two-year suspended sentence, 250 hours of unpaid work and a ban on being a director for five years.

His business partner, Robert Farrell, 52, was given a community order of 18 months, 120 hours of unpaid work and also banned from being a director for three years.

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Bradford Crown Court

During the proceedings, the court heard that Marsh and Farrell were directors of Direct Laundry Installations Limited before the company was put into voluntary liquidation by creditors in October 2015.

The liquidation sparked an Insolvency Service investigation into the behavior of the two gas fitters before investigators uncovered a series of breaches.

Prior to the liquidation of Direct Laundry Installations, the two gas fitters incorporated a second company in July 2015 called Direct Laundry and Steam Installations Limited.

The second company, however, violated insolvency law because it had a similar name, operated from the same address, and carried on the same business as the liquidated company.

Further investigations revealed that during the first company’s insolvency proceedings, Marsh and Farrell repeatedly failed to turn over the company’s books and records to the liquidators.

The pair also failed to properly explain why £68,000 was transferred from Direct Laundry Installations bank accounts, while providing a falsely backdated invoice in the name of the second company to justify the payment.

Investigators also found that the first company, Direct Laundry Installations, was fined £12,000 for an unlicensed dangerous gas installation, but the fine was never paid.

In October 2017, the two gas installers signed disqualification commitments and undertook not to exercise the function of corporate officer for seven to seven years.

Marsh and Farrell, however, did not resign from the second company for nearly five months and continued to run the direct laundry and backstage steam facilities, which was illegal.

Marsh was charged with an offense for reusing a banned company name. Farrell was charged with an offense for failing to co-operate with the incumbent and an offense for wrongfully backdating an invoice contrary to the Theft Act 1968.

Julie Barnes, the Insolvency Service’s chief investigator, said: ‘The law is clear that when a business is insolvent, directors are strictly prohibited from starting a new business with a similar sounding name before continuing as before without any consequences.This is to protect businesses and customers from being duped by administrators who do not run a business in a proper and professional manner.

“Colin Marsh and Robert Farrell, however, totally abused the insolvency regime when they incorporated a second, almost identical company when they were about to liquidate the first bankrupt company. Their conduct was totally reckless and their Penalties should serve as a warning that we will prosecute business leaders who break the law.”

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