The High Court ordered a five-year restriction against Conor Henley under section 150 of the Companies Act 1990 after finding that he favoured selected creditors of DCS Limited and gave less than candid explanations during the company’s liquidation. The court dismissed the application against his mother, Marie Henley, a non-executive director, because there was no specific evidence of wrongdoing by her.
The order means Henley cannot, for five years, act as a director or secretary, or take part in promoting or forming a company, unless it meets the requirements in section 150(3). The judgment does not specify when the five-year period begins.
DCS operated a convenience store at Leopardstown Valley Shopping Centre in County Dublin. Trading ceased in June 2000, and the company was wound up on 16 February 2001. Liquidator Michael Fitzpatrick sought restrictions against both respondents.
The court examined the company’s leasehold interest in the shop premises. In May 2000, DCS assigned the interest to Henley for a stated £125,000. He sold his interest the following month for £1.04 million, and the proceeds were used to pay company debts. The liquidator argued that the lease had been undervalued and that payments from the proceeds favoured some creditors over others. The judgment records that the liquidator’s independent valuer assessed the leasehold interest at £244,000 as of June 2000. Henley had settled separate proceedings concerning the transaction, paying €40,000 including costs; Boyle and Associates paid €60,000.
Henley said the company had expected investment for an online supermarket venture and that creditors left unpaid were expected to supply the new business. The court found no evidence that those creditors had agreed to support the venture. It also found that some creditors were not informed of the creditors’ meeting, and that the creditors whose debts were paid were those Henley considered important to future trading.
The judge also rejected key parts of Henley’s account of the family’s investment in DCS. His affidavits described more than €100,000 as invested and unrecovered, while the court found the amount owed to the family at liquidation was about £10,137. The court said the promised building society statements were not produced and found a lack of candour in his evidence. It further found inadequate cooperation with the liquidator over company records.
The restriction application against Marie Henley was refused. The court noted her non-executive role and the absence of evidence that she participated in or instigated the conduct in question.