The High Court has ordered Warren Logan to be disqualified for five years from acting as a company director or secretary, or taking part in forming or promoting a company, unless the company meets statutory requirements. The order followed an application by the liquidator of Beauty Holdings Limited, which was in voluntary liquidation.
Mr Justice Allen said he was not satisfied that Mr Logan had acted responsibly in conducting the company’s affairs. He found that Mr Logan had not carried out the full enquiry needed to reasonably conclude, in May 2013, that Beauty Holdings could pay its debts in full within 12 months.
The company sold hair and other beauty accessories. Its directors made a declaration of solvency on 30 May 2013, the day before the company resolved to wind up voluntarily. The statement of affairs listed estimated realisable assets of €610,855 and liabilities of €679,524, but showed a surplus of €31,331. The judge noted that the prospect of paying creditors depended entirely on the estimated value of the stock.
The judgment records concerns raised by the liquidators about missing or inadequate company records, overdue accounts and returns, uncertain Revenue liabilities and unreconciled directors’ loans. The company’s last annual return was made up to 31 March 2011. Its auditors had declined to express an opinion on its financial statements because they could not obtain adequate audit evidence.
The first liquidator later reported an outstanding Revenue liability of €798,124, including VAT and corporation tax, and said he had received no stock records. A subsequent liquidator said the stock could not be reconciled. Stock valued at €191,012 by cost was eventually sold to Mr Logan for €29,455 plus VAT. The judge said the transfer of stock worth €13,988 to Henry Street Hairspray Limited and an alleged €96,348 debt to that company had not been adequately explained.
Mr Logan disputed aspects of the liquidators’ figures, relied on later calculations and blamed others for problems with the records and stock. The judge said directors may delegate record-keeping and statutory compliance, but remain responsible for them. He found that the lack of proper records prevented accurate VAT returns and payments, and concluded that Revenue liabilities had not been identified and discharged when they should have been.
The court made the disqualification order sought under section 819(1) of the Companies Act 2014. The judgment says the restriction lasts five years and is subject to the statutory requirements in section 819(3). It was heard alongside a similar application concerning Hairspray Wholesalers Limited, and the judge directed that the two judgments be read together.