Directors of a Cookstown construction company that went into administration with debts of £3.7m have been disqualified from leading any similar companies for up to five years.
Department for the Economy took action against John Joseph MacMahon (67) and Anne MacMahon (68) both of Coolreaghs Road, Cookstown, in respect of their conduct as directors of J.J. MacMahon (Building Contractor) Limited, which traded from Loy Street.
John was disqualified from future roles as a director for five years, while Anne cannot hold such a role for three years.
The company went into administrative receivership on October 19, 2012 with estimated total assets available for creditors of £3,460,000, liabilities to floating charge holders of £5,893,364 and liabilities to unsecured creditors of £1,278,618.
But they had an estimated deficiency as regards creditors of £3,711,982, which wasn't reduced after taking into account the losses incurred by members (the shareholders) of the company, leaving debts of £3,751,982.
Tax of almost £220k, which wasn't paid from 2010-2013, was also owed despite payments to trade creditor being made.
The department accepted disqualification undertakings from John Joseph Sean MacMahon and Anne MacMahon on March 30, 2017 based on the following unfit conduct which solely for the purposes of the disqualification procedure was not disputed:
- Causing and permitting the Company to enter into transactions below market value and / or for no consideration in the 18/20 months prior to Administrative Receivership at a time when the Company was unable to pay its debts to HMRC as they fell due. These transactions caused an avoidable detriment to the Company and ultimately to the general body of its creditors. In doing so the Respondents breached their fiduciary duties to the Company
- Failing to account for assets and in failing to do so caused further detriment to the Company’s creditors
- Causing and permitting the company to operate a policy of discrimination against the Crown by retaining £218,790 that was properly payable to the Crown consisting of £140,353 in respect of PAYE/CIS for the tax years 2010/11 to 2012/13 and £78,437 in respect of NIC for the tax years 2010/11 to 2012/13, during which time the company was making significant payments to its trade creditors
- Failing in their duties as directors of the company, to prepare and file accurate annual accounts contrary to Section 396(2) and Section 393(1) of the Companies Act 2006
The department has accepted 44 disqualification undertakings and the court made three orders disqualifying directors in the financial year commencing April 1, 2016.