A former solicitor who helped directors fraudulently remove value from their failing company has been banned from running a business.
David Borland, trading under the name DAB Legal Services, conspired with Liberty Durant and Joseph Price to produce a fraudulent ‘contract of sale’ as the company Classic Caravans was going to be wound up.
The fake contract enabled Durant to claim ‘retention of title’ on the company’s stock that should have been used by the liquidator to repay creditors.
The contract was falsely back-dated to 2010 – two years before the company went into liquidation, and was proved to be fraudulent as one of the copies included the liquidator’s address, despite them only being appointed in 2012.
The Lincolnshire-based caravan manufacturer was incorporated in 2008 but ceased trading almost four years later with debts of close to £220,000, triggering the process to close down the business.
Work in progress was transferred to a new company, where Price was a director and Durant the sole shareholder, and the day before formal liquidation, Price informed the liquidator that Durant owned a significant amount of stock. This meant property worth £693,000 could not be returned as assets to the company creditors.
The case was referred to the Insolvency Service where investigators found that Liberty Durant had previously been disqualified in 2011 for six years in relation to a separate company and should not have been acting in the management of a company.
Before Lincoln Crown Court, all three individuals each admitted one count of fraud, with Durant also admitting acting in contravention of a disqualification order.
Durant was given a 10-year disqualification order, a £1,000 fine and a two-year prison sentence, suspended for two years. Price was given a six-year disqualification order, a £1,000 fine and a 16-month prison sentence, suspended for two years. Borland was given a five-year disqualification order, a £1,000 fine and 12-month prison sentence, suspended for two years.
Glenn Wicks, chief investigator for the Insolvency Service, said: ‘These men cynically and ruthlessly used a forged document in an attempt to defraud creditors and to allow Liberty Durant to act as a shadow director in breach of his disqualification. The court has shown this sort of behaviour will be dealt with severely.’