The High Court has declared that three former directors of College Freight Limited, which traded as Target Express, are subject to restrictions on acting as company directors or secretaries, or taking part in forming or promoting a company, unless it meets statutory requirements. The court made the declarations after finding that the respondents had not satisfied it that they acted responsibly in the company’s affairs.
The judgment was delivered by Mr Justice Tony O’Connor on 11 March 2016. The applicants were the company’s joint liquidators, Michael McAteer and Stephen Tennant. The respondents were Seamus McBrien, Ann McBrien and Michelle Cunningham, who were directors when the company went into liquidation.
The court said the company had suffered from the economic downturn, rising costs and lower charges from 2009. Bank of Scotland withdrew its invoice discounting arrangements at the end of 2011. In 2012, the company agreed with Revenue to pay €796,642.08 over nine months. Revenue issued an attachment order for €151,000 on 23 August 2012, leaving the company unable to pay staff wages the next day. It ceased trading on 27 August.
The court was concerned that the company’s estimated book debts of €5.873 million contrasted with €2.596 million that Close Invoice Finance found uncollectible. It said the respondents had not satisfactorily explained the disparity or addressed how long the company had traded while insolvent. The judgment also cited unexplained incorrect PAYE and PRSI returns for 2011 and the company’s failure to make an instalment payment due in July 2012.
The court found that the respondents had not adequately explained failures to comply with directions to prepare a statement of affairs. The eventual statement, the court said, did not accurately reflect the company’s position: it showed an expected surplus of nearly €224,000, while the liquidators estimated a deficit exceeding €5.5 million. The judgment also said the liquidators faced difficulty identifying and safeguarding company vehicles because of inadequate records and unclear vehicle use.
The court acknowledged that McBrien had suffered depression and that some evidence about vehicles was inadmissible. It said those points did not resolve the broader concerns. It also noted that Cunningham was a non-executive director, but said she retained her responsibilities as a director. The court concluded that no acceptable reason had been given to withhold the restrictions sought. The judgment does not specify a restriction period.