The High Court has restricted three former directors of Manvik Ireland Limited after finding they did not act responsibly in the conduct of the company’s affairs before it went into voluntary liquidation in May 2011. The court declined to make restriction orders against the two other respondents.
The application was brought by the company’s liquidator under section 150 of the Companies Act 1990. Mr Justice Binchy said transitional provisions meant it had to be decided under section 819 of the Companies Act 2014. The court ordered restrictions against Mark Kershaw, Philip Kershaw and Ciara Kershaw, under the terms sought in the notice of motion as amended to refer to the 2014 Act.
The judge found Mark Kershaw had been a shadow director within the 12 months before the liquidation, despite having resigned as a registered director in 2007. He relied on evidence that Kershaw convened a board meeting in 2010, sought appointment as group managing director, tried to suspend senior managers and signed company bank mandate forms. The judge said Kershaw’s explanations for signing the forms were unconvincing.
The company had ceased trading on 23 May 2011, with 39 employees. At liquidation, it owed the Revenue Commissioners €3.8 million and other creditors about €2.58 million. Its statement of affairs showed a shortfall of about €6 million. The court found that a substantial Revenue liability arose from undeclared income during a period when Mark Kershaw was a registered director, and that the debt was the biggest single factor leading to insolvency.
The liquidator also raised failures to file returns and accounts, inadequate books and records, and difficulties establishing the company’s financial position. The judge found primary responsibility for filing failures and inadequate records rested with the first three respondents. He noted that a vehicle sold to a third party was later found to be subject to a lease; he accepted the sale happened innocently and without directors’ intent to cause harm. The liquidator also could not locate several vehicles recorded as company assets.
The judge concluded that the first three respondents had not complied with Companies Act obligations and had not acted responsibly. He noted that directors could not simply abdicate responsibility. By contrast, he accepted that John Meade and Ryan Cunningham took up directorships while the company was in crisis, had little responsibility for the filing and accounting failures, and cooperated fully with the liquidator. He found no basis to restrict them.