Freedom Properties Director disqualified following £2m loss

22 June 2010



A Manchester-based property investment company director has been disqualified for shortcomings that resulted in a loss to creditors of nearly £2 million.

Caleb Storkey agreed to a seven-and-a-half year disqualification following an investigation by the Insolvency Service, which bans him from managing, controlling or being a director of a company until 2017. Signing this undertaking, Mr Storkey did not dispute that clients deposited monies under the impression they would be held on a client account by the firm Freedom Properties, when in fact they were utilised as company funds.

The company's tax affairs were also inadequately managed, with only two VAT returns filed during the four years of trading. Director of Company Investigations for the Insolvency Service Vicky Bagnall said that the disqualification undertaking should offer the public reassurance. "Where companies state funds will be held in client accounts pending completion of a transaction, as is common in property purchase, they must ensure that the funds are properly ring-fenced and not used as general funds," she said.

Simon Deans, practice group leader, comments: "Whilst an extreme example, this case highlights the need for directors to manage and minimise risk in their business - limited liability does not mean 'no liability'"

B P Collins' team of experienced corporate and commercial lawyers understand that clients expect pragmatic and commercial solutions and assistance in understanding and mitigating risk. We are committed to building long term relationships that help businesses to grow.

Please contact our legal team on 01753 279022, complete the online enquiry form or email commercial@bpcollins.co.uk.

Posted by Simon Deans

© Copyright