A further three companies have been wound up in the public interest by the High Court as part of on-going investigations by the Insolvency Service over the last six months. This brings the total number of firms put into compulsory liquidation for similar reasons to eight.
The three firms, Chiltern Consulting Ltd, Chilcons LLP and Source Financial Ltd, have all been found guilty for promoting “misleading, inaccurate and financially damaging information” regarding the use of pre-pack administrations to businesses with financial difficulties. All three firms were put into compulsory liquidation on 12th September 2013.
The three companies were found guilty of sending over 4,000 unsolicited emails a month, directing businesses to a website run by Chilterns that contained “inaccurate, misleading and incomplete information” on the use of pre-pack administrations. The materials also risked bringing the insolvency regime into disrepute through making generalised and disparaging remarks about the profession.
Graham Horne, Deputy Chief Executive at the Insolvency Service said, “Trust is the cornerstone of business relationships and the eight companies we have shut down violated that trust.” Graham also emphasised “The rescue of businesses in trouble is at the heart of the insolvency regime and every effort should be made to ensure that struggling but viable companies are turned around wherever possible, by getting good quality advice.”
The actions taken by the Insolvency Service is part of an on-going operation and further action is anticipated in the future. The outcomes are a fruition of several years’ work by the Insolvency Service to clamp down on abuse of trust within insolvency. The original five firms that have been wound up previously are; Adam Smith Business Development Ltd, Company Corporate Transfer Ltd, Genesys 2000 Ltd, The Recovery Partnership Ltd and TAG (Chesterfield) Ltd.