A company director who “repeatedly subverted the insolvency system” by facilitating debt-swamping arrangements for distressed companies has been banned from running companies for nine years, following a government investigation.
Neville Taylor, 57, served as a director of more than 400 companies and took nearly £270,000 from Atherton, operators of a scheme that took control of companies that were teetering on the brink of collapse. Instead of entering insolvency, these companies were allowed to cease trading without properly settling their debts.
The Insolvency Service revealed serious failings in 12 of the companies of which Taylor was appointed as a director. In each case, investigators concluded that Taylor “made no attempt to verify information relating to their affairs, including securing records and assets, breaching his duties as a director of the company and subverting the insolvency system in the process.”
The Atherton scheme, which is still running despite attempts by authorities to shut it down last year, is understood to have enabled directors of more than 1,000 struggling companies to escape debts amounting to tens of millions of pounds – including unpaid tax liabilities. The scheme was marketed as a “legal alternative to the use of insolvency practitioners” by a project called “National Company Rescue”, which allegedly induced directors to liquidate assets and divest distressed companies, ultimately depriving creditors of large sums.
Stephen Hunt, a partner at insolvency firm Griffins, who raised concerns about the scheme, described Taylor’s exclusion as “a useful public declaration that this type of service is inappropriate and others should stop immediately”.
Dave McGrath, director of investigation and enforcement at the Insolvency Service, said: “Neville Taylor obstructed efforts by the liquidators to identify assets, caused widespread loss to creditors and breached his duties as a director. He also accepted that his conduct was part of a scheme aimed at subverting and undermining insolvency legislation.
It is understood the Insolvency Service is considering further action against directors who used the Atherton scheme. Attempts to reach Taylor and John Irvine, the man behind Atherton, for comment were unsuccessful.