Bankruptcy-related disqualification for three years despite small body of creditors
A former manager of a bankrupt company has been imposed bankruptcy-related disqualification for three years by the Danish Maritime and Commercial High Court. The new ruling shows that also in cases with a relatively small body of creditors (of approximately DKK 80,000) bankruptcy-related disqualification can be imposed if the Court finds that the conduct has been grossly irresponsible. Plesner acted as the trustee of the estate.
After the issue of the bankruptcy order the company's bookkeeping material was not surrendered to the trustee as, according to the former manager, the company's bookkeeping material had been sent to Bosnia in order to have the bookkeeping done there.In connection with the estate administration the trustee discovered that the company had systematically been stripped of all the company's funds in the bank account partly by cash withdrawals and transfers into the manager's own private bank account and partly by numerous unidentifiable card transactions.
Claims against the estate in the amount of DKK 80,000Claims in the amount of approximately DKK 80,000 had been filed against the estate. The Danish tax authorities had filed a claim of approximately DKK 37,000 of the DKK 80,000 for primarily non-payment of VAT and tax.According to the trustee, the company's activities subject to VAT had not been reported correctly to the Danish tax authorities and the rules on withholding and settlement of tax at source and labour market contributions had been violated.After the legal action about bankruptcy-related disqualification had been brought the company's manager acknowledged that the company's bank account has also been used privately.
Bankruptcy-related disqualification for three years
The Danish Maritime and Commercial High Court held that the rules of the Danish Bookkeeping Act had been violated. The Court also found that the company's funds had been used for purposes that had nothing to do with the company and the company had failed to make correct reports and settlements to the Danish tax authorities in respect of VAT and tax.Despite the fact that claims only amounting to approximately 80,000 had been filed against the estate the Court found that the manager's overall business conduct had been grossly irresponsible. It was therefore found that the manager was unfit to participate in the management of commercial activities and bankruptcy-related disqualification, meaning that the manager may not participate in the management of a business, was imposed on the manager for three years.The ruling shows that also in matters where the body of creditors is relatively small may bankruptcy-related disqualification be imposed if just the overall conduct can be deemed to be grossly irresponsible.
Click here to read the entire ruling (Danish)