The High Court imposed five-year restrictions on four directors of 360Atlantic (Ireland) Limited, finding that none had satisfied the court they acted responsibly in the affairs of the insolvent company. The application was brought by the company’s official liquidator under section 150 of the Companies Act 1990.
In a judgment delivered on 21 December 2004, Ms Justice Finlay Geoghegan said the company had operated as part of a closely connected international telecoms group, with its Irish operations financed and controlled from Barbados. That group structure did not remove the directors’ duties to inform themselves about the Irish company and take part in decisions on significant transactions affecting it, she held.
The company was incorporated in 1999 and later became 360Atlantic (Ireland) Limited. It owned the site and was involved in construction of a cable landing station and switching facility at Clonshaugh Industrial Estate in Dublin. The judgment described a severe downturn in the telecommunications market and the collapse of the group’s restructuring efforts before the company entered liquidation. Its statement of affairs estimated a deficiency of about £23.37 million; the court said no dividend would be available even to preferential creditors.
The liquidator argued that the directors had not properly overseen the company’s finances, including a 2000 guarantee and debenture securing group borrowings. The judge found that the guarantee created security over company assets despite substantial unsecured advances already made to it by group companies. She also found that the directors had not shown they considered whether significant transactions were in the Irish company’s interests.
The court found that Rory O’Ferrall, the liquidator, had established that David Lede was a director within the relevant period, despite Lede’s assertion that he had resigned in August 2000. Lede acknowledged he had not given the company’s affairs the required attention. The judge was not satisfied he had acted responsibly during his tenure.
Patrick Coughlan, the only director resident in Ireland, had cooperated with the liquidation and took steps to appoint a receiver. But the judge found he had not informed himself adequately about the company’s financial affairs and had delegated responsibility too extensively to the group’s financial team. Herbert Heise and George Hoar did not appear or provide evidence, and the court could not be satisfied they had acted responsibly.
The judge said the statutory restriction was mandatory once the directors failed to meet that test. She also stated that the court could not take account of possible effects on their future commercial lives in deciding this application. The judgment addressed only their responsibilities as directors of this company; it did not determine any later application under section 152.