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Stephen James Dodd, director of furniture retailer Brian James Holdings Limited, formerly based in Cannock, Staffordshire, has been disqualified from being a director for five years for paying himself and friends from dwindling company funds, ahead of customers and creditors.

The disqualification, which starts on 12 April 2013, follows an investigation by the Insolvency Service.

Mr Dodd, 66, of Lichfield, Staffordshire has given an undertaking to the Secretary of State for Business, Innovation and Skills not to act as a director or in any way manage or control limited companies until April 2018.

Brian James Holdings Limited was incorporated in 1975 and traded from premises in Bridgetown, Cannock, where it employed 19 staff. The company began to experience cash flow difficulties in 2009 and by February 2011 was unable to pay all its debts as they fell due.

The company collapsed into administrative receivership in March 2011 with losses of more than £2.6m, including almost £100,000 due to customers who had paid for furniture which they never received.

The investigation found that in the six weeks prior to this, at a time when the company was failing to pay suppliers and when there was a significant risk that customers who had paid deposits would not receive their furniture, Mr Dodd paid £53,864 from the company account to himself and his friends.

These payments to Mr Dodd included wage arrears and advance holiday pay at a rate of more than double his previous salary.

Commenting on the disqualification, Robert Clarke, Head of Company Investigations, Birmingham, within The Insolvency Service said:

“Directors who put their own personal financial interests above those of customers and creditors damage confidence in doing business and are corrosive to the health of the local economy.

“This ban should serve as a warning to other directors tempted to help themselves first; you have a duty to your creditors and if you neglect this duty you could be investigated by the Insolvency Service and removed from the business environment.”

Notes to Editors

1. Brian James Holdings Limited was incorporated in 1975 and from 1990 it traded as a furniture retailer from premises on Walsall Road, Bridgetown, Cannock, latterly employing 19 staff.

2. In 2009 the company suffered a trading loss of approximately £51,000 after its sales slumped by around 50% from the previous year. The poor trading performance, which was attributed to the economic climate and a fall in the retail market, led to cash flow difficulties.

3. There was a further decline in 2010 and by February 2011 the company was unable to pay all its debts as they fell due and was insolvent. A number of suppliers put the company’s account on stop as a result of non-payment and there was a significant risk that customers who had paid deposits for furniture would not receive their goods.

4. Despite this position, in a six week period Stephen Dodd caused the company to pay himself wage arrears of £30,586, which was more than double his previous salary, and he caused the company to pay £16,380 for vehicle hire charges to one friend and £6,898 for no consideration to a company of another friend.

5. The company went into administrative receivership on 25 March 2011 with losses of more than £2.6 million, which included £1.4 million to its bankers, £444,000 to trade suppliers and £99,000 to deposit customers.

6. On 18 March 2013 Stephen James Dodd signed a Director Disqualification Undertaking banning him from being a director of a company for a period of five years. The undertaking was accepted by the Secretary of State on 22 March 2013 and the period of disqualification will commence on 12 April 2013.

7. Disqualification undertakings were introduced in April 2001, they are an administrative equivalent of a disqualification order but do not involve court proceedings. Without specific permission of a court, a person with a Company Director Disqualification, including Undertakings, cannot act as a director of a company; take part, directly or indirectly, in the promotion, formation or management of a company; be a liquidator or administrator of a company; or be a receiver or manager of a company’s property.

Further information on director disqualifications and restrictions can be found at http://www.bis.gov.uk/insolvency/Companies/insolvent-companies/director-disqualification-and-other-action.

8. The Insolvency Service administers the insolvency regime, investigating all compulsory liquidations and individual insolvencies (bankruptcies) through the Official Receiver to establish why they became insolvent. The Service also authorises and regulates the insolvency profession; deals with disqualification of directors in corporate failures; assesses and pays statutory entitlement to redundancy payments when an employer cannot or will not pay employees; provides banking and investment services for bankruptcy and liquidation estate funds; and advises ministers and other government departments on insolvency law and practice. Further information about the work of the Insolvency Service is available from http://www.bis.gov.uk/insolvency.

9. You can now subscribe to get e-mail alerts from The Insolvency Service. To subscribe, go to our website: http://www.bis.gov.uk/insolvency/news and you will see a button to “sign up for email alerts and newsletters” or click on the following link:
https://public.govdelivery.com/accounts/UKBIS/subscriber/new.