Limited liability is a privilege that should not be abused – Kent mobile crane operator trading while insolvent has been disqualified from being a company director.

Christopher John Etheridge, director of Staplehurst-based D&R Pike Crane Hire Ltd, has been disqualified for six years by the Department for Business, Innovation & Skills after an investigation by the Insolvency Service.

The Insolvency Service investigation found that by 1st October 2011, D&R was unable to pay its liabilities, which totalled at least £77,036. He then continued trading for a further 4 years while knowingly insolvent.

Commenting on the disqualification, Andrew Stanley, the Insolvency Service’s Chatham official receiver, said: “There can be no doubt that Mr Etheridge was aware of D&R’s insolvency, nevertheless he chose to ignore this and exposed unsuspecting creditors to the risk of continuing to trade for a further four years.

“Whilst promising suppliers payments, he personally benefitted from the income of D&R and the protection that limited liability afforded him.

“Limited liability is a privilege that should not be abused and directors should note that should they do so, the Insolvency Service will take appropriate action to remove them from the business community.”

HM Revenue & Customs was owed at least £18,036 in VAT, corporation tax and national insurance contributions.

At least six creditors were pressing for payment and a county court judgement for £3,933 was secured against the company on 14th September 2011.

In addition it was found that there were 17 bounced cheques issued from D&R’s bank account totalling more than £8,000 and there were 21 rejected direct debits/standing orders totalling close to £7,000.

Despite these factors Mr Etheridge continued to trade increasing its liabilities from at least £77,036 as at 1st October 2011 to known liabilities of £103,175 as at the point of liquidation.

The situation was made worse in August 2013 when Mr Etheridge transferred D&R’s sole crane, its principle tangible asset and form of generating income and turnover, to an associated company for less than its worth. At this time, D&R had liabilities of at least £95,549. The company then suffered costs to hire back the crane, increasing its overheads and reducing any profit it may have made.