Wrongful Trading - Do we disengage?
We have a construction client that due to various difficulties is now hopelessly insolvent.
Difficulties were first identified in early March and we have been attempting to help in various ways since that point (cash flow forecasts, attendance at meetings relating to contractor disputes and various other support).
It has now become clear (over the last week or so) that the company is now trading whilst insolvent with no real prospect of being able to trade out of it and it is my view that an insolvency practitioner needs to be approached without further delay and I have given this advice.
The MD is carrying on regardless with what appears to be no real care for suppliers. They are incurring further liabilities and I have also heard (second hand) that the company are still applying for credit accounts. It appears his plan is to maximise recoveries from contractors and start a new company. Any report on his conduct would certainly be adverse.
To make matters worse, the MD has now resigned his directorship and a appointed someone else as a 'puppet' director whilst still being in control of the company. County court letters are starting to land along with threats of winding up notices.
What do we do?
Do we simply disengage?
Do we have to report this?
It is only actually reading this back it has now dawned on me how bad this is and I am concerned how this may reflect on my firm.
- Dividend dates 539 10
- simple one...capitalisation of legal fees on purchase of business 93 3
- Sole properietor 131 4
- transitioning payroll 213 8
- dividend proposals 66 2
- How to reclaim VAT that was missed off previous invoices? 211 2
- Deduction from Salary 274 8
- PPR exemption - can it be due on a bigger area than 0.5 hectares? 170 2
- Can I take action against my accountant for incompetence? 2,693 60
- Child Tax Credits - date of cessation of qualifying young person 73 2
- VAT on sales net of CIS suffered 426 10
- ACCA Cert/Dip in IFRS 153 2
- 12 Pay Problems 242 3
- VAT online filing exemptions 234 3
- Mutual trading organisation has chargeable gain 86 1
- Redudancy 83 1
- Redundancy pay for directors? 476 13
- VAT - Recharge 92 2
- Should Spanish VAT apply ? 352 4
- Legal title not in the company name 233 9
- Property exchange - 8-year legal delay following fall-out 621
- Cancelled 362
- SAGE Payroll Data for Import to MS Dynamics AX 342
- Cancelled 308
- Have you staged yet for auto enrolment? 281
- Probiz 270
- Free-standing washing machine - unfurnished lettings 227
- VAT on non-profit making clubs (ECJ VS West Dorset Golf Club) 226
- Phishing emails purporting to be from CIPFA? 202
- Is this UK incapacity benefit taxable in UK or Jersey? 174