Dealing with early enquiries from the Insolvency Service

• Key contacts
• Case studies
• FWJ takeaway

Be wary of Insolvency Service letters

If you are approached by the Insolvency Service asking for information about the company in liquidation, you need to take great care when responding.

Initial approaches are often in the form of:

• a standard letter; or
• a more detailed Questionnaire

It is vital to think about your responses carefully. Early legal advice can make a huge difference.

• What many directors do not realise is that with the best of intentions, they can send the completed forms back and inadvertently make their position much worse.
• Any letters or completed questionnaires can be used as evidence by the Insolvency Service in any later disqualification proceedings.

Directors also feel obliged to respond quickly – often without access to any company documentation.  Unless it is near the three year time limit for issuing proceedings, do not feel pressured in to a quick (and potentially harmful response).  We can come on board, take the stress out of the situation, request more time and access to company documents – so that any response is properly put together.

What kind of questions are commonly asked?

The Insolvency Service has a responsibility to make investigations into any company which enters into insolvency.

Often it will ask for information about

• how the company now in liquidation was run;
• who was involved in the management of the company;
• relationships with suppliers;
• HMRC and tax related payments or non-payment;
• why, in the directors’ opinion, the company went in to liquidation;
• the location of the company documents and IT information;
• questioning certain financial transactions, debtors and creditors;
• details of company contracts;
• details of director and employee remuneration.

How you respond is crucially important

It is vitally important to consider carefully what you say in response to these enquiries. Often, the letters or questionnaire appear very innocuous. But answering incorrectly or making inadvertent mistakes or admissions can be disastrous later on. Often, we find, with the best of intentions, directors sometimes say things which actually harm their case despite trying to be helpful.

With our director disqualification experience, our understanding of director misconduct and how the Insolvency Service frames their letters, we can make sure your response puts your best foot forward and doesn’t worsen your position.

Never feel pressured to respond quickly

The Insolvency Service are good at giving the impression there are tight timetables by which you must respond. This is rarely the case – you have the right to take your time to respond to these letters and company questionnaires. If you need more time – ask for it and say why.  Or better still, let us do it on our behalf.

Always ask to see back up documentation

No one can remember all the affairs of a company – especially as it can relate to events a number of years before it went into liquidation.

• The Insolvency Service must give access to company documentation if you need it to refresh your memory and provide answers to the disqualification letter or insolvency questionnaire.
• If you need access – ask for an inventory of the documents that hold. And if you need to see them, you can ask for copies or make an appointment.

How we can help you

With our disqualification expertise help built up over 20+ years, our team can

• help you avoid common mistakes;
• ensure you restrict your answers to what is strictly necessary;
• remove the stress of being pressured into making quick responses without sight of proper documentation
• advise you on the allegations and give you an initial opinion on whether a disqualification is likely or can be defended
• advise on other matters such as a disqualification undertaking, your current employment circumstances and the potential way to resolve the threatened disqualification claim.

Our specialist director services team is here to help. Seeking our expert advice at an early stage increases your prospects of successfully removing the threat of director disqualification. Speak to one of our team who will be delighted to assist you.

I was greatly impressed with the commercial, tactical and technical ability of the team at FWJ. They quickly got to grips with a complex set of facts and, through their hard work, had the proceedings against me dropped and a significant proportion of my legal fees repaid. I couldn’t recommend them highly enough.

A director we defended against a disqualification claim and other claims brought by a liquidator