Answer the Insolvency Service’s section 16 letter
If the Insolvency Service intend to make an application to disqualify you from acting as a company director they need to follow a procedure that is prescribed in the Company Directors Disqualification Act 1986. Your specialist insolvency lawyer will need to guide you through the process of dealing with and answering a “section 16” letter so that legal proceedings can either be avoided or you are prepared in the best possible was for the court proceedings that are to follow.
The Company Directors Disqualification Act 1986 sets out a process that the Insolvency Service must follow if proceedings are to be commenced in a way that is lawful. Section 16 (1) of the Company Directors Disqualification Act 1986 says the following –
A person intending to apply for the making of a disqualification order… shall give not less than 10 days’ notice of his intention to the person against whom the order is sought…
This means that the Insolvency Service must notify you that they intend to bring directors disqualification proceedings. The letter sent to you to tell you that those proceedings will be be sent under the guise of a “section 16” letter.
The section 16 letter will address the following issues:
* Explain the grounds upon which your conduct is alleged to have fallen below the standards expected of company directors
* Explain why it is that the Insolvency Service believe you are unfit to be a company director
* Tell you what period of time they will seek as a period of disqualification
* Offer you the opportunity to enter into an undertaking and accept a period of disqualification and therefore avoid the cost and inconvenience of legal proceedings
* Offer you a discount of time in the period of your disqualification
* Offer to provide to you a copy of the evidence upon which they intend to rely in the event that they proceed with an application to disqualify you
If the Insolvency have brought a claim to disqualify you as a company director and they have not sent to you a section 16 letter there are a range of options available to you. You will need an experienced and specialist insolvency disputes lawyer to work with you to devise a strategy that can exploit this deficiency in the Insolvency Service’s case.
The answer to that is “no”. You still have a window of opportunity to change the minds of senior people and the legal representatives of the Insolvency Service. In order to “move the needle” at this late stage you will need and experienced and specialist disqualification legal team that is capable of presenting your case in the best possible light.
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