Directors agree to disqualifications

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THE Department of Enterprise, Trade and Investment has accepted disqualification undertakings for eight years from both Gerard McLarnon (44) of Galgorm Road, Ballymena, and Joseph McLarnon (42) of Hervey Hill Road, Kilrea, in respect of their conduct as directors of MCL Investments (NI) Ltd.

MCL Investments carried on business as Leighinmohr House Hotel in Ballymena and went into administration on June 3, 2009 with estimated assets of £252,887 subject to a floating charge, liabilities of £500,481 to the floating charge holder, liabilities of £985,533 to unsecured creditors and an estimated deficiency as regards creditors of £1,233,127. After taking into account the losses incurred by members (the shareholders, including the directors) of the company, the total estimated deficiency was £1,233,129.

The Department accepted the disqualification undertakings from Gerard McLarnon on June 10 this year and from Joseph McLarnon on June 13 based on the following unfit conduct:

· failing to submit a Statement of Affairs in respect of the company;

· causing and permitting the company to be financed by the retention of £624,919.00 due to the Crown comprising £188,896.00 due in respect of PAYE for the period 2002 – 2010, £210,647.00 in respect of NIC for the period 2002 to 2010 and £225,376.00 in respect of VAT for the period 2005 to 2010;

· failing to fully co-operate with the Administrator;

· misusing company funds and thereby depriving the company of cash assets of £484,392 by lending the said sum to themselves and related parties;

· breaching their fiduciary duties to the company in that they failed to obtain security for the monies lent; entering into transactions which had no commercial benefit to the company; and acting in contravention of Article 338 of the Companies (NI) Order 1986 and Section 197 the Companies Act 2006.

The Department has accepted 15 disqualification undertakings and the court has made no orders disqualifying directors in the financial year commencing April 1.